How do you calculate closing costs on a house?
Buyer closing costs typically run 2–5% of the purchase price: lender fees (0.5–1%), title and escrow (0.5–1%), prepaids for taxes and insurance, plus government recording fees. On a $400,000 home, budget $8,000–$20,000 — about $12,000 is typical.
Typical buyer closing costs on a $400,000 purchase
| Category | Typical amount | What it covers |
|---|---|---|
| Loan origination (0.5–1%) | $2,000–$4,000 | Lender's charge for the mortgage |
| Title insurance + search | $1,500–$2,500 | Lender's + owner's policies |
| Appraisal + inspection | $600–$1,100 | $300–$600 each |
| Prepaids (tax, insurance, interest) | $2,500–$5,000 | Escrow cushion + first-year premium |
| Recording + transfer taxes | $200–$4,000 | Varies wildly by state/county |
| Total | ≈ $8,000–$16,000 | 2–4% of price |
How to read this table
- Total sits at the top of the table (≈ $8,000–$16,000) — 2–4% of price. If your situation looks like this row, plan against the upper half of the range rather than the midpoint.
- Recording + transfer taxes anchors the bottom ($200–$4,000) — varies wildly by state/county. Treat this as the conservative case you should still be profitable at.
- The gap between the top and bottom row is roughly 80×. That spread is why a single blended average is close to useless here — pick the row that matches your setup instead of averaging the column.
- Most rows are ranges, not single figures. The low end usually reflects a weaker month, a softer audience geography, or an unoptimised setup; the high end reflects a well-run, well-targeted operation of the same size.
- With 6 reference points in the "typical buyer closing costs on a $400,000 purchase" table, the fastest way to use this page is to find the closest row, take its typical amount, then stress-test it ±30% before you build a plan on it.
Context
The single biggest variable is location: transfer taxes alone range from $0 (Texas) to over 4% of price in parts of New York and Pennsylvania. Prepaids aren't fees — they're your own taxes and insurance collected early — but they still need cash at closing. Within three days of applying, your lender must send a Loan Estimate listing every charge; compare at least two, because lender fees are the most negotiable part.
What moves this number
Financing terms
Rate, down payment and amortisation drive cash-on-cash return more than purchase price does. The same building can cash-flow or bleed depending on the loan.
True operating expense ratio
Management, insurance, tax, maintenance, vacancy and capital reserve typically consume 35–50% of gross rent. Models that skip reserves overstate returns badly.
Vacancy and turnover
One 45-day vacancy plus a turn can erase a year of thin cash flow. Underwrite 5–8% vacancy even in tight markets.
Local regulation
Rent rules, short-term rental caps and licensing requirements change the achievable revenue of an identical property between neighbouring cities.
Methodology
Ranges compiled from 2025–2026 national lender fee schedules, title rate filings, and county recording fee schedules. Prepaids assume 6 months of a 1.1% property tax and a $1,900/yr insurance premium.
Assumptions and caveats
- Returns exclude appreciation and principal paydown unless a row states otherwise.
- Local tax, insurance and regulation can move these figures by several points in either direction.
- This page was last reviewed on 2026-10-01. Ranges are updated as new data lands, so re-check before using them in a contract or a plan.
- Use these numbers as a starting range, not a guarantee — your own historical data always beats a benchmark.
Frequently asked questions
How do you calculate closing costs on a house?
Buyer closing costs typically run 2–5% of the purchase price: lender fees (0.5–1%), title and escrow (0.5–1%), prepaids for taxes and insurance, plus government recording fees. On a $400,000 home, budget $8,000–$20,000 — about $12,000 is typical.
Which option pays the most in the typical buyer closing costs on a $400,000 purchase table?
Total, at ≈ $8,000–$16,000 (2–4% of price). That row represents the strongest case in this dataset, so use it as an upper bound rather than an expectation.
What is a realistic low-end figure?
Recording + transfer taxes at $200–$4,000 (Varies wildly by state/county). Plan your costs so the low end still works, then treat anything above it as upside.
Why do the numbers vary so much?
The spread between the highest and lowest row is about 80×. Financing terms and true operating expense ratio explain most of that gap — see the drivers section above for the full list.
Where do these numbers come from?
Ranges compiled from 2025–2026 national lender fee schedules, title rate filings, and county recording fee schedules. Prepaids assume 6 months of a 1.1% property tax and a $1,900/yr insurance premium.
How can I estimate my own number instead of using a benchmark?
Use the Closing Costs Calculator on RevenueLab — it takes your own inputs and returns a figure specific to your setup, which is always more accurate than a published range.
Model your own numbers
Related reading
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Last updated 2026-10-01.