What Closing Costs and Fees, and How Much Down Payment, Should I Expect on This Loan?
Expect roughly 2-5% of the purchase price or loan amount in closing costs (commonly a few thousand dollars up to around $12,000) and as little as 0-5% down, depending on loan type. Whether that cash comes out of pocket, gets covered by a credit, or gets rolled into your loan depends heavily on whether you're buying, refinancing, or tapping equity.
Last updated July 22, 2026How much should I expect to pay in closing costs?
Total closing costs commonly run 2 to 5 percent of the purchase price on a purchase loan, or of the loan amount on a refinance, as of mid-2026. In dollar terms that's typically about $2,000 to $12,000, depending on loan size, state, and whether you choose to pay points for a lower rate. This is a market-typical range, not a fixed rule. Costs are made up of lender fees (origination, underwriting, and processing), an appraisal fee, a credit report fee, title and escrow fees, and, on a purchase, state-specific recording and transfer taxes. Your loan estimate will show the exact breakdown for your transaction.
Do I pay closing costs out of pocket, or are they added to my loan?
It depends on your situation:
- Purchase loan: closing costs generally must be paid at closing, alongside your down payment, though a seller concession can offset some or all of them.
- Refinance, cash-out refinance, or home equity loan: closing costs are commonly rolled into the new loan balance, so you may not need cash upfront. On a cash-out refinance or home equity loan, many lenders commonly finance every closing cost except the appraisal fee, which is typically paid out of pocket.
- Second lien (HELOC or home equity loan) vs. a full refinance: a second lien typically carries meaningfully lower closing costs than a full first-lien refinance, because it does not require setting up an entirely new escrow account.
- Paying discount points for a lower rate: points raise your upfront closing costs; skipping points and accepting a higher rate lowers them.
Separately, specific upfront government program fees, such as the VA funding fee, the FHA upfront mortgage insurance premium, or the USDA guarantee fee, can be financed into the loan itself if you are using that particular loan type.
How much down payment do I need?
Minimum down payment on a purchase loan can be as low as 3 to 5 percent, depending on the loan program and your qualifications. VA loans allow 0 percent down for eligible borrowers. Your loan officer can tell you which minimum applies to your situation and credit profile.
How can I lower my out-of-pocket cost at closing?
Seller concessions (also called interested-party contributions) can help cover closing costs, but they are capped, and the cap depends on your loan type and, for conventional loans, your loan-to-value ratio. Down payment assistance programs, offered through federal, state, or local agencies, are another option and can reduce what you need to bring to closing.
| Item | Typical range or rule (as of 2026-07) |
|---|---|
| Total closing costs | 2-5% of purchase price or loan amount (varies by state and county) |
| Total closing costs, dollar terms | Roughly $2,000-$12,000 |
| Minimum down payment, most purchase loans | As low as 3-5% |
| Minimum down payment, VA loans | 0% |
| Seller concession cap, conventional, LTV above 90% | 3% of sales price |
| Seller concession cap, conventional, LTV 75-90% | 6% of sales price |
| Seller concession cap, conventional, LTV below 75% | 9% of sales price |
| Seller concession cap, FHA, regardless of LTV | 6% of sales price |
| Seller concession cap, USDA guaranteed loans, regardless of LTV | 6% of sales price |
| VA concession cap (beyond standard closing costs, which are uncapped) | 4% of the VA-appraised value |
Related questions
Sources
- https://www.consumerfinance.gov/ask-cfpb/what-fees-or-charges-are-paid-when-closing-on-a-mortgage-and-who-pays-them-en-1845/
- https://www.consumerfinance.gov/ask-cfpb/what-are-closing-costs-en-1845/
- https://www.consumerfinance.gov/owning-a-home/loan-estimate/
- https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/
- https://www.consumerfinance.gov/ask-cfpb/what-are-mortgage-points-en-136/
- https://www.usatoday.com/story/money/personalfinance/real-estate/2026/07/09/closing-costs-2025-homebuyers/90854987007/
- https://www.nerdwallet.com/mortgages/learn/home-equity-loan-vs-cash-out-refinance
- https://themortgagereports.com/94714/heloc-vs-cash-out-refinance
- https://www.bankrate.com/mortgages/what-are-closing-costs/
- https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/
- https://www.fha.com/fha_article?id=516
- https://singlefamily.fanniemae.com/originating-underwriting/mortgage-products/97-loan-value-options
- https://selling-guide.fanniemae.com/sel/b3-4.1-02/interested-party-contributions-ipcs
- https://www.fha.com/fha_article?id=324
- https://www.hud.gov/helping-americans/loans
- https://www.rd.usda.gov/files/3555-1chapter06.pdf
Educational information only, not individualized financial or legal advice. Program details and rates change; verify current terms with a licensed loan officer before making a decision.