Two buyers. Two $400,000 homes. Two entirely different closing day experiences.
In Washington, D.C., one buyer writes a check for approximately $17,000 in closing costs — over 4% of the purchase price. Fifty miles away in northern Virginia, a buyer on a similar home pays closer to $9,000. Drive to Missouri, and that same $400,000 purchase closes for roughly $3,500–$4,500.
Same loan amount. Same mortgage rate. Dramatically different closing costs — driven almost entirely by state and local transfer taxes, government recording fees, and whether an attorney is legally required at closing.
Closing costs are one of the most misunderstood expenses in homebuying, and their geographic variation is one of the least discussed. This guide gives you the state-by-state breakdown, explains what drives the differences, and shows you which line items are actually negotiable.
Key Takeaways - Closing costs average 2–5% of the loan amount nationally, per CFPB data; the median runs approximately $6,000–$7,000 excluding prepaid items - Washington, D.C. consistently has the highest average closing costs in the country — frequently exceeding $17,000 on a $450,000 purchase - Missouri, Indiana, Wyoming, and the Dakotas consistently rank among the lowest-cost states — often under 1.5% of purchase price - Transfer taxes are the single largest driver of state-by-state variation: some states charge nothing; others levy 2–3% of sale price - The CFPB reported that median total loan costs rose 36% between 2021 and 2023; shopping lenders remains the most effective cost-reduction strategy
What's Included in Closing Costs
Closing costs are the fees and prepaid expenses required to complete a home purchase. They fall into three broad categories:
Lender fees — charged by the mortgage lender for originating, processing, and underwriting your loan:
| Fee | Typical Range | Negotiable? |
|---|---|---|
| Origination / lender fee | 0.5%–1.5% of loan amount | Yes — most negotiable item |
| Discount points (optional) | 1% of loan per point purchased | Buyer choice |
| Underwriting fee | $400–$900 | Sometimes |
| Application fee | $0–$400 | Sometimes waived |
| Rate lock fee | $0–$500 | Sometimes waived |
| Credit report | $25–$75 | Fixed |
Third-party fees — charged by service providers the lender requires:
| Fee | Typical Range | Negotiable? |
|---|---|---|
| Appraisal | $500–$900 | Limited (fixed by AMC) |
| Title search | $200–$600 | Limited |
| Title insurance (lender's policy) | $600–$1,500 | Reissue rate if within 10 years |
| Settlement / closing fee | $500–$1,200 | Limited by market |
| Survey (if required) | $400–$800 | Fixed |
| Pest/structural inspection | $150–$500 | Buyer choice |
Government fees and taxes — the least negotiable costs, set by state and local law:
| Fee | Typical Range | Negotiable? |
|---|---|---|
| Recording fees | $50–$300 | No |
| Transfer taxes / deed tax | $0–$3%+ of sale price | No |
| Attorney fees (required in 22 states) | $500–$1,500 | Somewhat |
Prepaids (not fees, but collected at closing): - Prepaid interest: covers the days from closing to first payment - Initial escrow deposit: 2–3 months of taxes and insurance - First year homeowners insurance premium (often required upfront)
Prepaids are money you'd spend anyway — they're real cash due at closing but not a permanent cost like fees.
National Averages and the Cost Trend
Per CFPB mortgage disclosure data, closing costs typically run 2–5% of the loan amount. The CFPB's 2024 mortgage market study reported that the median total loan costs rose 36% between 2021 and 2023, driven by rising home prices (which scale many percentage-based fees) and increased origination costs.
LodeStar Software Solutions, which analyzes purchase mortgage closing cost data from actual closed loans, reported in its 2025 Purchase Mortgage Closing Cost Data Report that average total closing costs (excluding prepaids and points) ran approximately $6,900 on a $350,000 purchase loan nationally — though this average shifts dramatically by state.
On a national basis, the origination fee plus title insurance together typically represent 50–60% of total closing costs, making lender comparison shopping and title fee negotiation the two highest-leverage ways to reduce what you pay.
Closing Costs by State: The Complete Picture
The following table shows approximate closing cost ranges as a percentage of purchase price for buyers across all 50 states plus D.C. These figures reflect typical buyer-side costs including lender fees, title, and transfer taxes, but exclude prepaids. Actual costs vary by purchase price, lender, and county.
Highest-Cost States (typically 3%+ of purchase price):| State | Approx. Buyer Closing Costs | Primary Driver |
|---|---|---|
| Washington, D.C. | 4–6% | High excise/transfer tax (up to 2.9%) |
| Delaware | 3–4% | Realty transfer tax 2–4% (split buyer/seller) |
| New York | 3–4.5% | Transfer tax + mansion tax on $1M+ homes |
| New Jersey | 3–4% | Transfer tax up to 3.35% |
| Maryland | 2.5–3.5% | State + county transfer taxes (0.5–1%+) |
| Pennsylvania | 2.5–3.5% | 1% state + 1–2% local transfer tax |
| Connecticut | 2.5–3.5% | Transfer tax 0.75–1.25% + higher on luxury |
| Illinois | 2.5–3% | State + Cook County transfer taxes |
| State | Approx. Buyer Closing Costs | Primary Driver |
|---|---|---|
| Washington | 2–3.5% | Tiered REET: 1.1–3% on higher-value homes |
| California | 2–3% | County transfer taxes (0.11–0.55%+) + lender fees |
| Florida | 2–3% | Documentary stamp tax 0.7% |
| Michigan | 2–2.5% | State + county transfer tax ~0.86% |
| Minnesota | 2–2.5% | Deed tax 0.33% |
| Georgia | 2–2.5% | Modest transfer tax + attorney required |
| Virginia | 2–2.5% | Grantor tax + recording fees |
| Ohio | 2–2.5% | Conveyance fee 0.1% + local additions |
| Texas | 2–3% | No transfer tax but higher attorney/title fees |
| North Carolina | 2–2.5% | Excise tax 0.2%; attorney required |
| Tennessee | 2–2.5% | Realty transfer tax 0.37% |
| State | Approx. Buyer Closing Costs | Primary Driver |
|---|---|---|
| Arizona | 1.5–2.5% | No transfer tax; mostly lender + title |
| Nevada | 1.5–2.5% | No transfer tax |
| Utah | 1.5–2.5% | No transfer tax |
| Colorado | 1.5–2.5% | Near-zero transfer tax ($0.01 per $100) |
| Oregon | 1.5–2.5% | No statewide tax (Portland local tax applies) |
| Idaho | 1.5–2% | No transfer tax |
| Montana | 1.5–2% | No transfer tax |
| State | Approx. Buyer Closing Costs | Primary Driver |
|---|---|---|
| Missouri | 1–1.5% | No transfer tax; consistently lowest nationally |
| Indiana | 1–1.5% | No transfer tax; efficient closing market |
| Wyoming | 1–1.5% | No transfer tax; low fees generally |
| North Dakota | 1–1.5% | No transfer tax |
| South Dakota | 1–1.5% | No transfer tax; 0.46% of sale price historically |
| Alaska | 1–1.5% | No transfer tax; 0.54% of sale price historically |
| Wisconsin | 1.5–2% | Very low transfer tax (0.03%) |
Sources: Bankrate 2025 Average Closing Costs by State; homeonyourown.com 2026 Closing Costs by State; LodeStar 2025 Purchase Mortgage Closing Cost Data Report. Figures are approximations — use a closing cost calculator for your specific transaction.
The Five Highest-Cost States: What Drives the Numbers
1. Washington, D.C.
D.C. consistently tops every ranking of closing costs in the nation. The primary culprit: a real property transfer tax that scales with sale price — up to 1.45% for the buyer on properties over $400,000 — plus a recordation tax at similar rates. On a $450,000 purchase, total transfer-related taxes alone can reach $11,000–$13,000, before any lender or title fees. Bankrate's 2025 state-by-state data pegged average D.C. closing costs at approximately $17,545.
2. Delaware
Delaware imposes a realty transfer tax of 4% of the sale price — typically split 2% buyer, 2% seller, though this is negotiable. On a $400,000 purchase, the buyer's share is $8,000 in transfer tax alone. Per homeonyourown.com's 2026 analysis, Delaware buyers average approximately $12,157 in total closing costs.
3. New York
New York layers multiple transfer costs: a state transfer tax of 0.4% on the seller plus a "mansion tax" on buyers of 1% on purchases $1M–$2M (rising to 3.9% above $25M). New York City adds its own transfer tax of 1%–2.625%. Per Bankrate's analysis, New York closing costs average approximately $16,849 — though this skews high due to NYC transactions. Upstate buyers pay considerably less.
4. New Jersey
New Jersey's realty transfer fee is assessed on the seller but effectively priced into transactions, plus a buyer "mansion tax" of 1% on purchases over $1M. The total closing cost picture for New Jersey buyers frequently runs 3–4% of purchase price, per multiple 2025–2026 analyses.
5. Maryland
Run the numbers for your situation: Use our free loan amortization calculator to see your exact monthly payment, total interest, and full amortization schedule.
Maryland combines a state transfer tax (0.5% of sale price), a recordation tax (variable by county, often 0.5–1%), and county-level surtaxes. Montgomery and Prince George's counties add meaningful additional recording charges. Total buyer closing costs typically run 2.5–3.5% depending on county.
The Five Lowest-Cost States: Why They're Cheaper
1. Missouri
Missouri imposes no statewide real property transfer tax — the absence of this fee, which adds 1–3% in high-tax states, is the primary reason Missouri consistently ranks as the lowest closing cost state. Per America's Mortgage Solutions' 2025 analysis, Missouri buyers pay average closing costs well under $2,000 excluding prepaids.
2. Indiana
Indiana similarly has no transfer tax, and its title insurance and closing fee markets are highly competitive. Bankrate's data consistently places Indiana among the three lowest-cost states nationally.
3. Wyoming and the Dakotas
Wyoming, North Dakota, and South Dakota all impose no real property transfer tax and have relatively streamlined closing markets with minimal government recording fees. South Dakota historically shows one of the lowest closing cost percentages of any state — approximately 0.46% of sale price per historical ClosingCorp data.
4. Alaska
Despite Alaska's geographic remoteness and generally higher service costs, its closing costs as a percentage of sale price rank among the nation's lowest — approximately 0.54% historically — because the state imposes no transfer tax. The high sale prices of Alaskan properties in absolute terms mean percentage figures look low.
Transfer Taxes: The Single Biggest Driver of State Differences
The data is unambiguous: states with high closing costs have high transfer taxes. States with low closing costs have low or no transfer taxes.
A transfer tax (also called a deed tax, stamp tax, documentary stamp tax, or excise tax depending on state) is a government levy collected at the time of property transfer. It's calculated as a percentage of the sale price, deed value, or loan amount depending on state law.
States with no buyer-side transfer tax (or minimal recording fees only): Alaska, Arizona, Colorado, Idaho, Indiana, Louisiana, Mississippi, Missouri, Montana, North Dakota, Oregon (statewide — Portland has local tax), South Dakota, Texas, Utah, Wyoming
States with significant transfer taxes (1%+ of sale price total): D.C., Delaware, New York, New Jersey, Maryland, Pennsylvania, Connecticut, Washington State (tiered above $500K), Vermont, Rhode Island, Hawaii (on higher-value properties)
When a transfer tax is 2% of the sale price on a $400,000 home, that's $8,000 in closing costs before the buyer has paid a single lender fee. No amount of mortgage rate shopping eliminates a transfer tax — it's set by law.
Attorney-Required States: Where You Need a Real Estate Lawyer
In 22 states, a licensed attorney is legally required to perform some aspect of the real estate closing — reviewing title, conducting the closing, or disbursing funds. These states are sometimes called "attorney closing states."
States requiring attorney involvement at closing: Connecticut, Delaware, Georgia, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, South Carolina, Virginia, West Virginia (and several others with partial requirements)
Attorney fees add $500–$1,500 to closing costs but are generally predictable. In these states, attorneys often replace (rather than add to) the title company's settlement fee, so the net additional cost is frequently $200–$600 compared to non-attorney states.
If you're buying in an attorney state, budget for attorney fees as part of your closing cost estimate. The good news: attorney rates in most of these states are relatively competitive, and your real estate agent can typically recommend several options.
Buyer vs. Seller Closing Costs: Who Pays What
Closing costs are paid by both buyer and seller, but their allocation varies by state and transaction negotiation.
Buyer typically pays: - Loan origination fees - Appraisal - Title insurance (lender's policy) - Recording fees - Prepaid interest and escrow deposits - Home inspection - Transfer taxes in some states (D.C., Delaware partially)
Seller typically pays: - Real estate agent commissions (largest single closing cost) - Transfer taxes in most states - Title insurance (owner's policy in some states) - Prorated property taxes through closing date
Negotiable allocation: Transfer taxes, owner's title insurance, and closing/settlement fees are frequently negotiated between buyer and seller, especially in buyer's markets. In competitive markets, sellers rarely contribute — in slower markets, seller concessions of 2–3% of purchase price to cover buyer closing costs are common.
If you're purchasing with a VA loan, certain fees may not be charged to the buyer per VA lending guidelines — the seller or lender must cover them.
Which Closing Cost Fees Are Negotiable
Not all closing costs are created equal. Some are set by law; others are entirely at the lender's or service provider's discretion.
Most negotiable: - Origination/lender fee: The largest and most negotiable single fee. Always ask lenders to match or beat the lowest fee you've been quoted. Per a 2026 ICE Mortgage Technology study, borrowers who compared three or more lender quotes saved an average of $1,500 in closing costs - Discount points: Entirely optional — you choose whether to buy points to lower your rate - Title insurance: If you've owned the property before or it was recently sold, ask for a "reissue rate" — typically 30–40% less than a standard policy
Somewhat negotiable: - Settlement/closing fees: Vary between title companies and attorneys; worth comparing - Survey fees: Sometimes avoidable if a recent survey exists
Not negotiable: - Recording fees: Set by county - Transfer taxes: Set by state and local law - Appraisal fees: Set by AMC (Appraisal Management Company) schedules - Prepaid interest and escrow: Calculated from actual numbers, not a fee
The Loan Estimate (the standardized federal disclosure form lenders must provide within 3 business days of application) itemizes every closing cost — compare these across lenders using the same loan amount, rate, and term to find genuine fee differences.
How to Estimate Your Closing Costs Before You Shop
Step 1: Establish your state's transfer tax. Look up your state's transfer tax rate (your state government's revenue or treasury department website, or a quick search for "[state] real property transfer tax rate 2026"). This is often the largest non-lender fee.
Step 2: Estimate title insurance and settlement fees. Title insurance rates are set by state in some states, competitive in others. Call a local title company for a quote based on your purchase price.
Step 3: Get multiple Loan Estimates. Apply to three or more lenders for Loan Estimates. These are standardized documents that itemize every lender fee. Use them to compare, not just the interest rate.
Step 4: Add prepaids. Budget approximately 2 months of property taxes plus 1–2 months of insurance premiums as the escrow deposit, plus prepaid interest for the period between closing and your first payment.
Step 5: Total everything. Add transfer taxes + title fees + lender fees + prepaids. This is your realistic closing cost estimate. On most $300,000–$500,000 purchases in moderate-cost states, expect $6,000–$12,000 total; in high-tax states, $12,000–$20,000 is not unusual.
For a quick estimate, use the mortgage calculator which includes a closing cost estimator alongside the standard payment calculation.
Frequently Asked Questions
What are average closing costs in the United States?
Per CFPB mortgage disclosure data, closing costs typically run 2–5% of the loan amount. LodeStar's 2025 Purchase Mortgage Closing Cost Data Report pegged the national average at approximately $6,900 on a $350,000 loan (excluding prepaids), and noted a 3.8% increase from the prior year. The median varies significantly by state: Missouri buyers often pay under $3,000; D.C. and New York buyers regularly pay $15,000–$20,000 on comparable home prices.
Can I roll closing costs into my mortgage?
Yes, in most cases. You can finance closing costs by taking a slightly higher interest rate (a lender credit covers the fees) or by adding them to the loan balance on a purchase, if the home appraises for enough to support the higher amount. Rolling costs into the loan means you pay interest on them for the life of the loan — on $8,000 at 6.75% over 30 years, that adds roughly $5,500 in additional interest. For borrowers with limited cash who plan to stay long-term, this tradeoff may still make sense; for those planning to refinance or sell within 5–7 years, it often doesn't.
Are closing costs tax deductible?
The rules are narrow. Origination fees and points paid to buy down the rate may be deductible in the year paid (for a primary residence purchase) — but only if you itemize deductions, and only the "loan origination" portion, not all fees. Property tax prepaids are deductible to the extent they represent actual property taxes. Most other closing costs (appraisal, title insurance, recording fees) are not immediately deductible but may increase your cost basis, which affects capital gains calculation when you sell. Consult a tax advisor for your specific situation.
What are seller concessions and how do they affect closing costs?
Seller concessions are credits the seller offers to cover some or all of the buyer's closing costs, typically negotiated as part of the purchase offer. In a buyer's market, requesting 2–3% seller concessions is common and reasonable — in effect, you pay slightly more for the home (or negotiate a slightly higher price) in exchange for the seller funding your closing costs. This reduces the cash you need at closing without increasing your loan amount. FHA, VA, and conventional loans each have maximum concession limits (3–6% depending on down payment and loan type) set by the respective agency guidelines.
Do I need to pay closing costs if I refinance?
Yes — refinances carry the same types of closing costs as purchases, though transfer taxes typically don't apply. Average refinance closing costs run 2–5% of the loan balance (roughly $7,000–$17,500 on a $350,000 refinance, per Bankrate's 2026 analysis). Some lenders offer "no-closing-cost" refinances where fees are either rolled into the loan balance or covered by a higher rate. Neither is truly free — the costs are paid over time through the larger balance or higher rate. See the refinance break-even calculator to model whether refinancing makes sense for your situation.
How much should I budget for closing costs when saving to buy a home?
Budget 3–5% of the expected purchase price for a safe estimate. In low-cost states (Missouri, Indiana, Wyoming), 2–3% is more realistic. In high-transfer-tax states (D.C., Delaware, New York, New Jersey), 4–6% is appropriate. On a $400,000 home, that's a $12,000–$20,000 range in high-cost states, or $8,000–$12,000 in moderate-cost states. Add this to your down payment savings goal to arrive at the total cash-to-close you'll need. Most buyers are surprised by how much cash is required at closing beyond the down payment — budgeting realistically from the start avoids last-minute financing scrambles.
Can closing costs vary between lenders in the same state?
Significantly. Within the same state, lender origination fees are the most variable item — they can differ by $2,000–$4,000 between lenders on the same loan. Transfer taxes and recording fees are fixed by law and identical regardless of lender. Title insurance and settlement fees vary by which title company is used. The practical implication: shopping lenders reduces closing costs primarily on the lender fee side; you won't find different transfer tax rates. Per CFPB research on mortgage shopping behavior, borrowers who compare multiple lenders consistently pay less in total closing costs than those who take the first quote offered.
Closing costs are one of the most concrete areas of homebuying where research before the purchase pays real dividends. Knowing your state's transfer tax burden, understanding which fees are negotiable, and comparing Loan Estimates from multiple lenders can realistically save you $2,000–$5,000 on a standard transaction — sometimes more.
Use the mortgage calculator for a closing cost estimate alongside your monthly payment calculation. For any home you're seriously considering, request a full Loan Estimate from at least three lenders and compare the fee sections line by line — the differences will be clearer than any rate comparison alone.
