Mortgage Refinance Closing Costs and Fees

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Mortgage refinancing is one way to save money on interest payments, cash out some of your home equity to use on home repairs or improvement projects, or just lower your monthly payment. Just like your initial mortgage, a refinanced mortgage comes with closing costs and fees.

Let’s take a closer look at the benefits and cost to refinance your mortgage so you can make an informed decision about refinancing.

How Much Does It Cost to Refinance a Mortgage?

Refinancing a mortgage is the same as closing on your house, minus the down payment. Depending on your financial situation, the costs may not outweigh the overall money-savings of the refi. Refinancing could save you tens of thousands of dollars over the life of the new mortgage. In most cases, that is much more than the closing costs you’ll have to pay.

According to Freddie Mac, the average cost of mortgage refinancing is $5,000. You can expect to pay approximately 2% to 5% of the total loan amount in closing costs. Your closing costs can also be affected by:

  • Type of loan
  • Purchasing discount points
  • Location
  • Fees for title or other services required to close loan
  • Whether or not it is a cash-out refinance

Mortgage Refinancing Fees: Breakdown

Are you wondering, what does it cost to refinance a mortgage? Here’s a list of the possible mortgage refinance fees you will pay to close a refi and what you can expect to pay for each:

Credit Report


Loan Origination Fee

Title Insurance

Prepaid Interest Charges

Flood Certification

Mortgage Points

Home Appraisal

$30 to $50

Up to $250

0.5% to 1.5% of the loan amount


Depends on rate and day of closing

Up to $25

Depends on number of points at 1% of loan amount per point

$200 to $600


How to Lower the Costs to Refinance

If you are considering refinancing your mortgage, you are probably interested in saving money. A mortgage refinance can save you the most money in the long term, but it could cost you some money up front. To take advantage of a low-cost mortgage refinance, consider these strategies for lowering closing costs.

  • Skip the home inspection: While an appraisal is required to document the value of your home, an inspection is not necessary. You’ve been living in your house for a while and know what problems, if any, it has.

  • Ask your lender how to save on closing costs: Your lender may have a no- or low-closing cost mortgage option you could consider. You may have to pay a higher interest rate, but the deal could still save you money in the long run.

  • Get your own title insurance: You’ll need title insurance, but if you use the same title insurance company you used when you first bought your house, you could save money. 

  • Get quotes for third-party fees: It’s wise to get quotes for third-party services such as title search, survey, and settlement agent. You may be able to shop around for a lower fee on any of these services.

  • Set closing for end of month: Your closing costs will likely include prepaid interest from the date of closing to the beginning of the next month. By signing the closing papers at the end of the month, you reduce the number of days of prepaid interest you must pay at closing.

Reducing the amount of money you have to pay to close your mortgage refinance could help make it more affordable for you to cash in on the savings of a lower interest rate or reduced term mortgage. Can you avoid closing costs when refinancing? Let’s explore that idea further.

Can I Refinance My Mortgage With No Closing Costs?

A no-cost mortgage refinance means that you do not pay certain fees at closing. It does not mean that you do not pay fees at all, however. Your lender may be willing to pay your loan settlement costs in exchange for charging you a higher interest rate on your mortgage loan.

Another option to help lower mortgage refinance closing costs is via a no-cash refinance. In this situation, the loan settlement costs are incorporated into the mortgage loan’s balance, and you pay for them over time.

Mortgage Refinance: Commonly Asked Questions


Refinancing your mortgage might allow you to save money by taking advantage of lower interest rates, shorten the term of your mortgage loan so you pay it off faster, or get cash to make home repairs or pay off high interest debts. If you have money for the mortgage refinance closing costs, you could save quite a bit in the long term by refinancing.


Mortgage refinance closing costs encompass several types of fees, from appraisal fees to interest payments. The fees for services like appraisal and title insurance are not deductible. Any money you pay at closing for mortgage interest or real estate taxes may be tax deductible. Ask your tax-preparer if mortgage refinance closing costs are tax deductible to confirm your specific situation.


Refinancing to a lower interest rate or a shorter-term mortgage loan can save you money, lower your monthly payment, provide cash or reduce the number of years you have to pay off your mortgage. Even lowering your interest rate by less than one percentage point can still save you thousands over the life of the mortgage.

Are there closing costs on a mortgage refinance? Sure, there are. The average closing costs to refinance a mortgage can be about $5,000. By making that investment, you could save several times that amount in interest payments over the life of the loan.

Looking to Refinance Your Home? Union Home Mortgage Can Help.

It’s important to calculate potential closing costs and savings on refinancing your mortgage. Union Home Mortgage is here to help. Learn more about refinance closing costs on our Refinancing page.

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