Quick answer
On a $330,000 purchase, closing costs of 2%–5% come to $6,600–$16,500. The biggest levers are a seller credit — up to $9,900 on a conventional loan with 5% down, more with FHA or a larger down payment — and a lender credit, which on this loan is worth about $3,135 for a slightly higher rate. Shopping the services you’re allowed to choose and closing late in the month trim the rest.
Key facts
6%
Seller limit, FHA
FDIC Affordable Mortgage Lending Guide (summary of HUD Handbook 4000.1) · Oct 29, 2026
What you can cut, and what you can only move
Closing costs are a mix of fees, taxes and prepaid bills. The closing costs guide explains each line; for lowering the total, it helps to sort them by who controls the price.
| Cost (Loan Estimate section) | Who sets the price | How to lower it |
|---|---|---|
| Origination charges and points (A) | The lender | Compare lenders; take a lender credit; skip points |
| Services you cannot shop for — appraisal, credit report (B) | The lender’s chosen providers | Compare whole Loan Estimates between lenders |
| Services you can shop for — title, settlement (C) | You choose, often from the lender’s list | Get your own quotes |
| Taxes and government fees (E) | State and local law | Who pays can be negotiated; the rate can’t |
| Prepaids — interest, insurance, taxes (F) | Your loan, policy and calendar | Pick the closing date; shop insurance |
| Initial escrow deposit (G) | Tax and insurance due dates | Can’t be cut, only timed |
Any of the costs can be paid by someone else — the seller, through a credit on the contract, or the lender, through a higher rate. Those two levers are usually worth far more than trimming individual fees.
Lever 1: shop the services you’re allowed to shop for
Page 2 of the Loan Estimate splits third-party services into those you can’t shop for and those you can. For the second group, the CFPB says you can save money by shopping separately; the lender must give you a list of providers, and you can look beyond it after checking with the lender.
There is a trade-off in where you shop. If you pick a provider from the lender’s list, those charges and recording fees together can’t rise by more than 10% at closing — on an example $3,000 estimate, no more than $300. If you choose a provider who isn’t on the list, that protection doesn’t apply, so get a firm written quote.
Mortgage credit checks within 45 days count as a single inquiry, so comparing several lenders on the same day costs little. Compare the totals in section A and the bottom line of page 2, not just the rate.
Lever 2: trade a little rate for a lender credit
A lender credit is a rebate toward your costs paid for with a higher interest rate — points in reverse. How much rate one point’s worth of credit costs is set by each lender; the table uses three example values for a $3,135 credit (1% of a $313,500 loan), starting from today’s 7.24% average.
| Rate increase for the credit (percentage points) | New rate | Extra a month | Credit stays ahead for | Net after 5 years | Net after 10 years |
|---|---|---|---|---|---|
| +0.125 | 7.37% | $27 | 7 yr 10 mo | +$1,159 | −$827 |
| +0.25 | 7.49% | $53 | 3 yr 11 mo | −$818 | −$4,793 |
| +0.375 | 7.62% | $80 | 2 yr 7 mo | −$2,796 | −$8,765 |
“Net” counts the credit, minus the extra payments and the slightly higher balance you would owe if you sold or refinanced. At the middle assumption, the credit pays $3,135 up front and costs $53 a month plus a slightly slower paydown, so it stays ahead for about 3 years and 11 months. If you are likely to sell or refinance before then, the credit wins; if you’ll keep the loan for decades, paying the costs yourself does.
Lever 3: ask the seller to pay — within your loan’s limit
Sellers can agree to credit you money at closing, and in a slow market that is often the cheapest dollar you will find. Each loan program caps how much a seller, builder or agent can contribute, measured against the price (or the appraised value, if lower):
| Loan | Limit | Maximum on this price | Covers 2%–5% closing costs? |
|---|---|---|---|
| Conventional, under 10% down | 3% | $9,900 | Low-end costs, not the high end |
| Conventional, 10%–24.99% down | 6% | $19,800 | All of it, even at the high end |
| Conventional, 25% or more down | 9% | $29,700 | All of it, even at the high end |
| Conventional, investment property | 2% | $6,600 | Low-end costs, not the high end |
| FHA | 6% | $19,800 | All of it, even at the high end |
| VA | No limit on closing-cost credits; other concessions up to 4% of reasonable value | $13,200 in concessions | Closing costs, plus extras such as the funding fee |
A conventional credit can cover closing costs and prepaids, but not the down payment or reserves. Anything above the limit, or above your actual costs, is treated as a price reduction and can shrink the loan the lender will make. VA doesn’t limit credits for the loan’s closing costs and caps other concessions — paying your funding fee or debts, for example — at 4% of the home’s reasonable value. For points the seller pays, see points or a bigger down payment.
Lever 4: choose the closing date
At closing you prepay interest from the closing day to the end of that month; your first regular payment then comes due on the first of the month after next. Closing late in the month shrinks that prepaid amount.
Prepaid interest on a $313,500 loan at 7.24%, in a 30-day month
| Closing day | Days of interest paid at closing | Prepaid interest |
|---|---|---|
| Day 2 | 29 | $1,803 |
| Day 10 | 21 | $1,306 |
| Day 20 | 11 | $684 |
| Day 28 | 3 | $187 |
Daily interest is about $62. Closing on day 28 instead of day 2 cuts the cash you need by roughly $1,617.
This lowers your cash to close, not your total cost: you pay interest for every day you have the loan either way. It is still worth doing when cash is tight — and it can be paired with the other levers.
Lever 5: closing-cost assistance
Many state and local housing agencies help with closing costs as well as the down payment, usually for first-time or income-qualified buyers. A few examples from our data:
- Washington, DC: the Home Purchase Assistance Program offers closing-cost help of up to $4,000.
- San Diego: a middle-income closing-cost grant of up to $10,000.
- Texas: TDHCA’s My First Texas Home assistance of 2%–5% of the loan can go toward the down payment and closing costs — see the Texas guide.
Most programs require homebuyer education and set income and price limits. Our first-time buyer programs guide and down-payment assistance roundup show what to look for.
No-closing-cost offers: what you give up
A “no-closing-cost” mortgage is the lender-credit lever pushed to the limit: the rate rises until the credit covers the lender’s fees and third-party charges. You still pay prepaids and the escrow deposit, and taxes and government fees may or may not be covered. The no-closing-cost refinance guide compares that route over 3, 5 and 10 years; the same math applies to a purchase.
It makes most sense when you expect to move or refinance within a few years, or when the cash would otherwise force a smaller down payment and higher PMI. Ask each lender for its no-cost rate alongside its par rate on the same day.
Your closing-cost checklist
Get Loan Estimates from several lenders on the same day
Same loan type, down payment and lock period; credit checks within 45 days count as one inquiry.
Ask each lender to price a credit
Request the rate with no points, with points and with a lender credit, and compare them over how long you’ll keep the loan.
Negotiate a seller credit in the contract
Stay within your loan’s limit and below your actual costs.
Shop the services in section C
Get quotes for title and settlement, and check whether the provider is on the lender’s list.
Shop homeowners insurance
The first year’s premium is paid at closing; see homeowners insurance and your mortgage.
Set the closing date late in the month
If cash is tight, it cuts prepaid interest.
Check the Closing Disclosure
It arrives at least 3 business days before closing; compare every section with your Loan Estimate.
Frequently asked questions
What is the easiest way to lower closing costs?
Ask the seller for a credit and the lender for a credit. On a $330,000 conventional purchase with 5% down the seller can pay up to $9,900, and a lender credit of $3,135 costs only a slightly higher rate. Shopping services and the closing date save less but cost nothing.
Can the seller pay all my closing costs?
Often, if the credit stays within your loan’s limit: 3% of the price for a conventional loan with less than 10% down, 6% with 10%–24.99% down, 6% for FHA. VA doesn’t limit credits for closing costs. Credits can’t exceed your actual costs.
Is a no-closing-cost mortgage worth it?
It is if you’ll sell or refinance before the higher rate costs more than the credit saved — about 3 years and 11 months in our example, assuming the rate rises 0.25 percentage point for a credit worth one point. Over decades, paying the costs yourself usually wins.
Does closing at the end of the month save money?
It lowers the cash you bring, because you prepay fewer days of interest — about $1,617 less on day 28 than day 2 on a $313,500 loan. It doesn’t lower the total interest on the loan.
Can I roll closing costs into my mortgage on a purchase?
Generally not directly, because the loan is limited by the price and the minimum down payment. Seller and lender credits do the same job, and FHA and VA let you finance the upfront mortgage insurance premium or funding fee.
Which closing costs can’t be negotiated?
Transfer and recording taxes are set by state and local law, though who pays them can be negotiated. The escrow deposit depends on your tax and insurance due dates. Both still appear on the Loan Estimate in sections E and G.
Sources
- Freddie Mac Primary Mortgage Market Survey — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- CFPB — Typical closing costs, low end (share of purchase price); Typical closing costs, high end (share of purchase price) (Oct 28, 2026)
- CFPB — Cost of one discount point (share of loan amount) (Oct 19, 2023)
- CFPB — Cumulative limit on increases for recording fees and lender-listed services (Sep 11, 2024)
- Fannie Mae Selling Guide B3-4.1-02 — Fannie Mae: most an interested party may pay toward closing costs, principal residence or second home, LTV/CLTV above 90%; Fannie Mae: most an interested party may pay toward closing costs, principal residence or second home, LTV/CLTV 75.01–90%; Fannie Mae: most an interested party may pay toward closing costs, principal residence or second home, LTV/CLTV 75% or less (May 7, 2025)
- FDIC Affordable Mortgage Lending Guide (summary of HUD Handbook 4000.1) — FHA: most a seller or other interested party may contribute toward your costs (share of the lower of price or appraised value) (Oct 29, 2026)
- U.S. Department of Veterans Affairs — VA limit on seller concessions (share of the home’s reasonable value) (Oct 28, 2026)
- CFPB — Mortgage credit checks within this window count as one inquiry (Aug 28, 2026)
- DC Department of Housing and Community Development: Home Purchase Assistance Program — HPAP closing cost assistance, up to (FY2027)
- San Diego Housing Commission: First-Time Homebuyer — San Diego Housing Commission middle-income closing-cost grant (Feb 1, 2026)
- Texas Department of Housing and Community Affairs — TDHCA My First Texas Home assistance, low end (share of loan); TDHCA My First Texas Home assistance, high end (share of loan) (Program matrix Aug 17, 2026)
- CFPB — You receive the Closing Disclosure at least this many business days before closing (Oct 28, 2026)
- CFPB: Loan Estimate explainer
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.