Buyer Closing Cost Calculator
Estimated Closing Costs for Buyers
Total Closing Costs
Cash to Close
Loan Amount
Compare with Your Loan Estimate
Use this checklist when you receive your Loan Estimate (within 3 business days of application) and Closing Disclosure (at least 3 business days before closing).
TRID tolerance categories: Some fees cannot increase (zero tolerance), some can increase up to 10% (10% tolerance), and some can change without limit (no tolerance). See the CFPB Loan Estimate explainer for details.
How to Calculate Closing Costs
The calculator follows the standard Loan Estimate grouping (12 CFR 1026.37) and Closing Disclosure (12 CFR 1026.38). Here is the step-by-step method:
What are closing costs?
Closing costs are the fees and expenses you pay to finalize a home purchase. They include lender origination charges, third-party services (appraisal, title, settlement), government taxes and recording fees, prepaid items (interest, insurance, taxes), and escrow deposits. The total typically ranges from 2% to 5% of the loan amount.
How much are closing costs?
For a typical US home purchase, closing costs range from 2% to 5% of the loan amount. On a $400,000 loan, that's $8,000 to $20,000. Your exact amount depends on your lender's origination fees, discount points, title insurance, government recording and transfer taxes, prepaid interest, and escrow deposits. Use the calculator above for an itemized estimate based on your specific inputs.
- Loan amount = Purchase price − Down payment.
- Section A – Origination charges: Origination fee (percentage of loan or flat amount) + Discount points (percentage of loan or flat amount).
- Section B – Services you cannot shop for: Appraisal, credit report, flood certification, tax service, and similar lender-required fees.
- Section C – Services you can shop for: Title insurance (lender's policy), settlement/escrow fee, attorney fee, survey, inspection.
- Section E – Taxes and other government fees: Recording fees, transfer taxes, mortgage recording tax (user-entered; vary by state, county, city).
- Section F – Prepaids:
- Prepaid interest = Loan amount × Annual rate ÷ Day-count basis (365 or 360) × Days from closing day to month-end (inclusive of closing day if lender counts it).
- Homeowner's insurance = Annual premium × (Prepaid months ÷ 12).
- Mortgage insurance (if any) = Monthly premium × Prepaid months.
- Property tax prepaid = Monthly tax × Prepaid months (if applicable).
- Section G – Initial escrow payment:
- Property tax escrow = Monthly tax × Escrow months.
- Insurance escrow = Monthly insurance × Escrow months.
- MI escrow = Monthly MI × Escrow months (if applicable).
- Section H – Other: HOA transfer fees, capital contributions, home warranty, etc.
- Total closing costs = Sum of Sections A through H − Lender credits.
- Cash to close = Down payment + Total closing costs − Earnest money − Seller credit − Lender credit (if not already netted in total closing costs).
Rounding: Each line item is rounded half-up to the nearest cent before summing. Percentages are shown to three decimal places. This matches standard mortgage disclosure practice.
Worked Example
Below is a hypothetical example using the fixture values from the calculator specification (Case C1). All amounts are illustrative.
| Input | Value |
|---|---|
| Purchase price | $400,000.00 |
| Down payment (20%) | $80,000.00 |
| Loan amount | $320,000.00 |
| Interest rate | 6.50% |
| Closing day | 14th of a 30-day month |
| Origination (1% of loan) | $3,200.00 |
| Discount points (1% of loan) | $3,200.00 |
| Appraisal | $650.00 |
| Credit report | $50.00 |
| Title insurance | $1,800.00 |
| Recording fees | $250.00 |
| Prepaid interest (17 days, 365-day basis) | $968.77 |
| Homeowner's insurance (12 months) | $1,800.00 |
| Property tax escrow (3 months @ $366.67/mo) | $1,100.00 |
Total closing costs (365-day basis): $13,018.77 = 4.068% of loan = 3.255% of price
Total closing costs (360-day basis): $13,032.22 = 4.073% of loan = 3.258% of price
Cash to close (Case C2): $80,000.00 + $13,018.77 − $8,000.00 − $5,000.00 = $80,018.77
These are hypothetical test values computed with exact decimal arithmetic. They test the calculator's math, not real fee schedules. Your actual costs will differ.
Glossary
- Origination charge
- The lender's fee for processing and underwriting the loan, often expressed as a percentage of the loan amount (e.g., 1%).
- Discount points
- Prepaid interest to buy down the mortgage rate. One point = 1% of the loan amount.
- Title insurance
- Insurance protecting against title defects. Lender's policy is required; owner's policy is optional but recommended (often paid by seller).
- Recording fee
- County fee to record the deed and mortgage in public records.
- Transfer tax
- State, county, or city tax on the transfer of real property. Rates vary widely by location.
- Escrow
- An account held by the lender to pay property taxes and insurance on your behalf. Funded at closing and monthly thereafter.
- Prepaid items
- Costs paid at closing for future periods: prepaid interest, homeowner's insurance premiums, property tax installments.
- Loan Estimate (LE)
- A standardized three-page form lenders must provide within 3 business days of a mortgage application (12 CFR 1026.37).
- Closing Disclosure (CD)
- A standardized five-page form lenders must provide at least 3 business days before closing (12 CFR 1026.38).
- Cash to close
- Total funds the buyer must bring to closing: down payment + closing costs − earnest money − seller credit − lender credit.
- Seller credit
- Amount the seller agrees to pay toward the buyer's closing costs. Reduces cash to close.
- Earnest money
- Good-faith deposit made with the offer, held in escrow and applied at closing.
- Lender credit
- Lender-paid closing costs in exchange for a higher interest rate. Reduces cash to close but increases long-term cost.
Limitations, Exclusions, and Assumptions
- User-entered fees: All fee amounts are user-entered or illustrative defaults labeled as assumptions. They are not typical, average, or required national figures.
- State and local variation: Transfer taxes, recording fees, mortgage recording taxes, title insurance rates, attorney requirements, and escrow customs vary by state, county, and city. This calculator treats them as user-entered line items.
- No state transfer-tax schedules: No state-specific transfer tax schedule is built in. Enter your local amounts.
- Loan program fees: FHA upfront MIP, VA funding fee, USDA guarantee fee are not calculated. Enter as a user-defined line if applicable.
- Property tax proration: Not calculated. Prorations between buyer and seller are handled at settlement and vary by local custom.
- Mortgage insurance: Only user-entered amounts are used. No automatic MI calculation based on LTV or loan program.
- TRID tolerances: Tolerance categories (zero, 10%, unlimited) are not enforced in this calculator. See the CFPB Loan Estimate explainer for official rules.
- Prepaid interest convention: Both 365-day and 360-day bases are offered. Confirm with your lender which they use.
- Not a quote or legal advice: This is an estimate for budgeting only. Final figures come from your Loan Estimate and Closing Disclosure.
Official References
- CFPB – Loan Estimate Explainer (12 CFR 1026.37)
- CFPB – Closing Disclosure Explainer (12 CFR 1026.38)
- CFPB – Your Home Loan Toolkit
- eCFR – 12 CFR Part 1026 (Regulation Z)
- HUD – Buying a Home
- Fannie Mae – Closing Costs
- Freddie Mac – Closing Costs
Sources listed above are official starting points. Last checked: 2026-10-18. Rules and fees change; verify with your lender and the CFPB for current requirements.
