How much are closing costs?

When you're saving to buy a home, your down payment is usually top of mind. However, closing costs will also be required to finalize the transaction and they can get surprisingly high.

Below, CNBC Select breaks down the expenses included in closing costs, how much you can expect to pay and what you can do to lower the amount.

Some of the closing costs buyers commonly pay include:

Lender fees

Most lenders will charge borrowers administrative fees for processing their application, running a credit report and underwriting their mortgage.

Title fees

When you choose a home to make an offer on, your lender will hire a company to check that no one else has a claim or lien on the property. Title insurance helps pay the cost of resolving any problems that may arise.

Appraisal and home inspection fees

Before approving financing, lenders want to make sure a house is worth the asking price. That involves hiring a professional appraiser and home inspector to evaluate the property's condition.

Private mortgage insurance

If you are making a down payment of less than 20%, you'll probably be required to pay private mortgage insurance until you reach 20% home equity. This is to protect the lender in case you default on your loan. If you have an FHA or USDA loan, you may pay mortgage insurance premiums instead.

Other prepaid expenses

Other expenses that crop up at closing include your first homeowners insurance premium, property taxes and mortgage interest.

You may also be required to pay attorney fees, escrow fees and recording fees (to register the new deed). If you're buying a condominium, you'll probably have to pay HOA fees.

According to LodeStar Software Solutions, the national average for mortgage closing costs in 2025 was $4,661, or 1.06% of a home's sale price.

While there are closing costs associated with refinancing a mortgage, they're more modest. The average in 2025 was $2,403, according to LodeStar.

In most cases, the borrower pays closing costs. Some lenders, like Better Mortgage and Alliant Credit Union, don't charge origination or lender fees. They often make up the difference with slightly higher interest rates or by bundling costs into the total loan amount.

Others offer grants that cover closing costs. Bank of America gifts up to $7,500 toward non-recurring closing costs, while Chase Bank's Chase Homebuyer Grant provides up to $5,000.

Even if there are no special programs, you can always try to negotiate with your lender and ask if they can reduce or eliminate some fees or have them paid by the seller.

If you can't avoid paying closing costs, there are still ways to delay them.

Look for assistance

One option, especially if you're a first-time homebuyer, is to apply for a down payment assistance program. It usually involves a grant or forgivable loan to help new homeowners and the money you save can be put toward closing costs.

Consider a smaller down payment

If you're short on cash in hand, you could lower your down payment and set aside the difference for closing costs. For example, if you're planning to put 5% down on a conventional mortgage, you might be able to reduce the amount to 3%. It'll lead to a higher overall mortgage principal, meaning you'll pay more over the life of the loan.

Roll the closing costs into the mortgage

Despite its name, a no-closing-cost mortgage doesn't come without closing costs. They're just added to the loan principle or the interest rate. This will make the mortgage more expensive in the long run, but you could refinance it later into one with better rates and terms.

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