Average Closing Costs 2025 | List of Closing Costs

What are closing costs?

When you buy or refinance a home, closing costs are the required fees and expenses needed to finalize the mortgage.

Average closing costs typically range from 2% to 5% of the loan amount, but the exact total depends on factors like loan type, lender, and location. Your list of closing costs includes lender fees, title insurance, appraisal fees, escrow expenses, and other charges necessary to complete the loan.

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This guide breaks down average closing costs and provides a closing costs list to help you understand the fees involved in securing a mortgage.

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Average closing costs
Closing costs list
Understanding loan estimates
Reducing closing costs

How much are closing costs?

Average closing costs usually fall between 2% and 5% of your home’s purchase price. That means if you’re buying a $300,000 home, you could pay anywhere from $6,000 to $15,000 in fees.

According to ClosingCorp, average closing costs for a single-family home were around $6,800, but this amount is expected to rise in 2025 as home values continue to increase.

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Since closing costs vary based on factors like credit score, type of home loan, and location, using a closing cost calculator can help you estimate your costs, but a lender’s quote will provide the most accurate number.

Complete list of closing costs

When you’re buying a home or refinancing, the closing costs list can feel overwhelming. While average closing costs range from 2% to 5% of the loan amount, not every borrower will pay the same fees.

Some costs apply to nearly all home buyers, while others depend on your state, loan type, or whether you’re purchasing in a homeowners association (HOA) community. Below, we break down the fees most borrowers will pay first, followed by additional costs that may apply in specific situations.

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Common closing costs most borrowers pay:

Loan origination fee (0-1% of loan amount): Charged by the lender or broker for processing the loan.
Realtor commissions (5%-6%): Typically paid by the seller but impacts the overall home sale.
Processing fee ($300-$900): Covers document gathering and verification.
Underwriting fee ($300-$750): Pays for reviewing and approving your mortgage application.
Application fee ($200-$500+): Some lenders charge this fee upfront for processing your loan request.
Credit report fee ($35): Covers the cost of checking your credit history.
Home appraisal fee ($500-$1,000+): Pays for a home appraisal to confirm the sale price is in line with market value.
Home inspection fee ($300-$500): Covers a home inspection to assess the property’s condition before closing.
Title search, title report, and title insurance ($300-$2,500+): Ensures there are no liens on the property and protects against ownership disputes.
Lender’s title insurance ($300-$1,500+): A policy that protects the lender if a title dispute arises.
Owner’s title insurance (optional): Protects the buyer from future title claims.
Escrow fee ($350-$1,000+): Paid to the title company or escrow account service handling funds and documents.
Recording fee ($20-$250): Covers county fees to record your new mortgage.
Prepaid taxes and insurance ($1,000-$4,500+): Covers property taxes and an insurance policy for the first months of homeownership.
Prepaid interest: Covers interest from closing to the first mortgage payment.

Situational closing costs:

These costs only apply in certain locations or specific home-buying situations.

Mortgage points or discount points (0-1% of loan amount): Optional fees that lower your interest rate.
Private mortgage insurance (PMI) (varies): If your down payment is less than 20% on a conventional loan, your lender may require PMI. While it’s typically a monthly cost, some lenders require an upfront payment at closing.
Real estate attorney fee ($400+): Some states require a real estate attorney to review closing documents.
HOA fees (varies): If the home is in an HOA, buyers may need to pay HOA fees upfront.
Homeowners association transfer fee (varies): Covers the cost of updating HOA records.
Survey fee ($400+): Sometimes required to verify property boundaries.
Flood certification ($20): Determines if flood insurance is required.
Inspection fees ($300-$1,000+): Some loans require additional inspections, such as termite or septic system checks.
Notary fee ($100): Pays for notarizing closing documents, typically in states requiring in-person closings.
Closing protection letter (CPL) fee ($50): Provides legal protection in escrow transactions.
Document prep fee ($50): Covers preparation of final loan paperwork.

Government-backed mortgages also require an upfront insurance premium or guarantee fee. This covers all or part of the cost for the federal government to insure your loan.

FHA loan: Upfront mortgage insurance premium (1.75% of loan amount)
VA loan: VA funding fee (1.4% to 3.6% of loan amount)
USDA loan: Upfront mortgage insurance fee (1% of loan amount)

Understanding mortgage closing costs before you buy can help you plan ahead and potentially save money. Reviewing your lender’s estimate carefully and shopping around for lower fees can help you keep your closing costs list as affordable as possible.

Understanding your Loan Estimate and Closing Disclosure

All lenders use standard loan forms called the Loan Estimate and Closing Disclosure. Lenders are required to send you a Loan Estimate (LE) after you apply. This document will list your loan terms, interest rate, and every closing fee associated with the offer.

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All Loan Estimates use the same format, making it easy for you to compare rates and fees to find the best deal. You can also use your Loan Estimates as leverage. If one lender offers a great rate but another offers lower fees, you can bring your low-fee estimate to the first lender and see if it will reduce your costs.

Closing Disclosures

The second document you will receive is the Closing Disclosure (CD). Lenders are required to send you a CD at least three business days before your closing date. This document will list the final details of your mortgage—which should closely match the rate, terms, and closing costs on your initial Loan Estimate.

There are legal limits to the amount your closing costs can increase on the CD. If you see a change in your fees before closing, be sure to bring it up and get an explanation. You’re never committed to a mortgage until you sign—so before you do, make sure you’re getting the deal you were promised.

How to reduce your closing costs

If you’re buying a new home or refinancing your mortgage loan, you might be shocked by the extra costs at closing. Even with a low down payment, fees like title insurance, appraisal fees, and escrow can really add up.

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The good news? You don’t always have to pay the entire list of closing costs upfront. Here are a few ways to save money on closing costs:

Ask for seller concessions: In some cases, the seller pays part of the closing costs as part of the deal. This works best when sellers are motivated, but you might need to agree to a higher price for the home.
Get lender credits: Some mortgage lenders will cover part of your closing costs—but in exchange, you’ll get a slightly higher interest rate, which means a higher monthly payment.
Roll costs into your loan: If you’re refinancing, you may be able to add closing costs to your total loan amount instead of paying them upfront. Some loan programs (like VA loans or USDA loans) also allow certain fees to be financed on a purchase. Just remember—this means you’ll pay interest on them.
Look for assistance programs: Many states and cities offer closing cost assistance or grants to help with closing costs, especially for first-time homebuyers.
Negotiate fees: Many lender fees, like origination fees and even real estate agent commissions, can be negotiated. Some agents may offer discounts or rebates, so it’s worth asking about your options.

By comparing mortgage lenders, negotiating fees, and exploring assistance programs, you can keep more money in your pocket and make homeownership more affordable.

FAQs about average closing costs in 2025

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What is the average cost of closing on a mortgage loan?

The average closing costs typically range from 2% to 5% of the home’s purchase price. For instance, on a $300,000 home, you can expect closing costs to be between $6,000 and $15,000. These costs can vary based on factors such as the location of the property, the type of loan, and the specific fees charged by service providers involved in the transaction.

How do you calculate average closing costs?

To calculate average closing costs, start by adding lender fees (like origination and underwriting fees), title insurance, appraisal fees, escrow fees, and prepaid costs such as property taxes and homeowner’s insurance. Additionally, include third-party fees for services like inspections and attorney fees. Summing these will give you a comprehensive estimate of the average closing costs.

What items are included in closing costs?

The typical list of closing costs includes lender fees like origination and appraisal fees, title insurance, escrow fees, recording fees, attorney fees, and prepaid expenses such as property taxes and homeowner’s insurance. Keeping this closing costs list in mind will better prepare your budget and avoid any unexpected expenses.

Who is responsible for paying closing costs?

Both buyers and sellers share responsibilities for paying closing costs, depending on the terms of the sale agreement. Typically, buyers are responsible for lender-related fees, appraisal fees, and prepaid costs like insurance and taxes. Sellers usually cover real estate agent commissions and may agree to pay certain closing costs as part of negotiations. Additionally, some costs can be negotiated between both parties to balance the financial responsibilities.

Do closing costs vary by state?

Yes, closing costs can vary significantly by state due to differences in local regulations, taxes, and fees. Factors such as state transfer taxes, recording fees, and required inspections contribute to these variations. For example, some states may have higher property taxes or specific disclosure requirements that increase closing costs. It’s important to research the typical closing costs in your state or consult with a local real estate professional to get an accurate estimate.

What are closing costs on a $500k house?

Closing costs on a $500,000 house generally range from $10,000 to $25,000, based on the typical 2% to 5% of the purchase price. The exact amount can vary depending on the specific services required, the location of the property, and any negotiated concessions between the buyer and seller.

Can closing costs be negotiated?

Yes, closing costs can be negotiated to reduce the financial burden on either the buyer or the seller. Buyers can negotiate with sellers to cover part or all of the closing costs through seller concessions. Additionally, buyers can shop around for lenders offering lower fees or request lender credits in exchange for a higher interest rate. Negotiating these costs can help lower the upfront expenses required at closing.

When are closing costs due?

Closing costs are typically due at the closing day meeting, which is the final step in the home-buying process. During this meeting, all parties sign the necessary documents, and the buyer provides the funds to cover the closing costs, usually in the form of a cashier’s check or wire transfer. It’s important for buyers to be prepared with these funds by the scheduled closing date to ensure a smooth and timely completion of the transaction.

Find the best loan for you

Many homebuyers focus on mortgage rates, but closing costs can add thousands to the price of the home. On average, closing costs range from 2% to 5%, meaning a $300,000 home could come with $6,000 to $15,000 in upfront fees.

Because average closing costs vary by lender and type of loan, shopping around is key. A list of closing costs can include origination fees, title insurance, real estate agent commissions and other charges that impact your total loan amount.

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