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The Cost To Refinance Your Mortgage: How Much Is It?


What You Need To Know

  • Refinancing closing costs can run between 2% and 5% of the outstanding balance
  • Reduce your monthly mortgage payment or the length of your loan by refinancing your mortgage
  • If refinancing saves you 1% on your remaining loan, it’s usually a good idea


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Interest rates are low and you’ve been paying off your mortgage for a few years. Maybe you’ve started to wonder if refinancing will save you any money. Well, it depends on how much the refinance process is going to cost.

The cost to refinance your mortgage might be well worth the effort if you’re looking to pay off your mortgage sooner, take advantage of lower interest rates or reduce your monthly mortgage payments. 

You can even take out cash on the equity in your home with mortgage refinancing.💰

Refinancing can add a lot of value to your finances. But you’ll need to stay on top of the costs to make sure that you’re in a better financial position after closing. There are also ways you can make refinancing more affordable.

How Much Does It Cost To Refinance?

Typically, you can expect to pay anywhere from 2% – 5% of the principal loan amount in refinance closing costs and other fees. To help you estimate the cost of your mortgage refinance, try this helpful mortgage refinance calculator.

The cost to refinance will depend on several things, including where you live, the size of your loan and the type of property you’re refinancing.

When you refinance, there are several professionals you’ll have to pay, including your lender, attorney and other parties involved in the process. 

But here’s a tip: Try and save some cash by comparison shopping mortgage lenders (like you, hopefully, did for your original mortgage). Remember that a low interest rate may come with higher closing costs. Compare closing costs and other lending fees to try and get the best refinance offer. 

So, let’s dive into the costs and fees you can expect to see when refinancing your mortgage:

Appraisal fee

This fee is paid to a licensed appraiser who’ll visit your home and tell you what it’s worth. Depending on certain factors, it’s not unusual for an appraisal to cost as little as $600 or as much as $2,000.

Underwriting fee

This covers the cost of having a loan officer underwrite your loan. Underwriting is the process of a lender researching whether they want to approve you for your loan. Most lenders charge $400 – $600 for underwriting.

Loan origination fee

This fee covers the cost to prepare (and pieces involved in) preparing a mortgage. Sometimes this fee isn’t charged, but when it is, it’s 0.5% – 1.5% of the loan amount. 

Application fee

Remember all that paperwork you had to fill out when you applied for your mortgage? Well, refinancing is no different. 

You’ll have to fill out a ton of paperwork and submit supporting documents to your lender. Your application will have to be processed and filed. And for all that trouble, guess what? You may be charged a fee that will vary by lender.

Recording fee

Your recording fee pays for the services provided by the clerk or agency that keeps track of your completed loan documents. This fee can vary a lot. Expect to pay anywhere from $25 – $250, depending on your lender. 

Credit check fee

Feel familiar? Just like you did when you got your original mortgage, you’ll have to submit to a credit check when you refinance. The fee for this is usually around $25 – $50. 

Title search and insurance fee

Your property is the security (aka collateral) for the loan. Before your lender can refinance your mortgage, they need to know there is nothing against the title of your home, like a lien or a judgment, that would prevent them from selling the property if you defaulted on your payments. 

The title search also confirms that you’re still the legal owner of the property. After the title search, your lender will require that you get title insurance, which protects the lender in the event of future property claims against your home. In most cases, the title search and insurance fee will run you anywhere from $500 –  $900. 

Survey fee

Most lenders require a land survey before they’ll refinance your mortgage. The survey confirms details like the plot size and the terrain of your property. This should cost about $275 but could cost as much as $400, depending on the typical cost of land surveying where you live. 

Attorney fee

You may need to have an attorney review your final refinancing documents. They can also take care of things like title searches, and they can oversee the transfer of funds. In some states, you’re required to have an attorney present at closing; in others, you’re not. Legal fees for real estate transactions vary. 

Flood certification fee

Most lenders want to know if your home is located in a flood plain, so they’ll ask you to get a flood certificate from your local government department. This generally costs about $25, give or take. 

Average total costs

The total cost to refinance a mortgage will depend on the size of your loan. But as a rough estimate, you should plan on your fees ranging anywhere from $4,000 – $10,000 on a refinanced loan balance of $200,000. It’s a wide cost range because of the variety of fees that go into underwriting your loan as well as a few other variables.

How Are Refinance Costs Determined?

Along with the range of fees you might pay, some core factors can affect the cost of refinancing your mortgage. 

Your location and the lender you choose can heavily influence the cost to refinance your mortgage. 

In cities and states where the cost of living is higher (think: Los Angeles and New York), you can usually expect to pay higher fees, closing costs and interest rates. 

On the flipside, many states in the South, Midwest and Rockies have lower average closing cost fees. In areas with cheaper real estate, you’ll pay less in closing costs as well.

Besides your location and lender, there are a few other key factors that will likely affect your refinancing costs, including: 

  • The size of your loan
  • Your credit score (and the credit score of your co-signer) 
  • How much equity you’ve got in your home
  • The mortgage term and type you choose

How Can I Know if Refinancing Is Worth the Costs?

If you’re still paying down your mortgage, refinancing can benefit your financial health in a ton of ways. 

Pay your house off faster or lower your monthly mortgage payment

Prime interest rates go up and down all the time. But occasionally, they drop so low that you’d be crazy not to take advantage. 

If you can save more than 1% on your mortgage by refinancing and you still have a long time left to pay it off, it’s usually a good idea to make the leap and refinance. 

By refinancing your mortgage with a similar loan term as your original loan (basically refinancing from a 30-year mortgage to another 30-year mortgage), you might dramatically lower your monthly mortgage payment. If you want to pay your house off faster, take advantage of the lower interest rate and make the same monthly payment on a shorter-term mortgage loan.

Get rid of your private mortgage insurance (PMI)

If you already own more than 20% of your home, refinancing is a good way to get rid of the PMI premium that comes out of your wallet every month. Homeowners with at least 20% equity can take out a mortgage without having to pay for the insurance.

Hop on the fixed-rate train

Once in a while, variable- or adjustable-rate mortgages have rate increases that go well above the fixed-mortgage rate. When that happens, refinancing can help you take advantage of a lower fixed rate and lock it in for the length of the loan.

Tap into your equity

Because it’s low-cost financing, equity comes in quite handy when you need to consolidate debt. For instance, current mortgage refinance rates are around 3.39% (depending on the terms) for a 30-year fixed-rate mortgage. Personal loan interest rates are running upwards of 5.99% – even to 35% and higher. 

Tapping into your equity also helps if you need to access a large sum of cash. Many people use the equity they’ve built up to finance major expenses, like home renovations, college costs or weddings.

How to Lower Your Refinance Costs

If you’re hoping to shave off some of the cost of refinancing your mortgage, look no further. Follow our tips on getting a lower interest rate. And, if you’re lucky, you might even be able to lower your fees. 

Boost your credit score

This step will cost you some time and patience, but it’s worth it. Spend a few months showing your credit score some love. Pay down your debts, keep your balances low and watch your score start to climb.

Comparison shop

If you don’t like the rates and fees offered by your current lender, don’t be afraid to shop around. Mortgage brokers are a great resource when it comes to finding the best refinancing rates. If you prefer to do it on your own, take time to research the different terms and mortgage refinance rates available from banks and alternative lenders.


Chances are you that negotiated the price of your home when you bought it. There’s no reason not to take the same approach when you refinance your mortgage. 

Sit down with your lender and talk about what fees they may be willing to reduce or cut. There’s a good chance they’ll be willing to negotiate.

Ask your lender to waive closing costs 

When you don’t have the cash on hand to cover closing costs, ask your lender to take care of it for you. Most lenders can offer a no-closing-cost refinance. So, instead of paying your closing costs upfront, the costs get folded into the principal balance, and you’re charged a higher interest rate on the loan.

Buy mortgage points

You can buy mortgage points (aka discount points) when you close on your loan. It’s a one-time fee you pay upfront. Depending on what your lender has to offer, they’ll either temporarily reduce the interest rate for the first few years of your mortgage refinance or they’ll permanently reduce it. Score!

Stick with your original title insurer

In most cases, title companies offer discounts when you refinance with the same lender. Ask your lender what they can offer before you start shopping around.

Refinancing Your Mortgage Takes Time

Refinancing your mortgage is a great way to boost cash flow. It can save you some money on your monthly payments, or it can be the thing that helps you pay your loan off faster. Choosing a lender who offers low costs to refinance is important. Just be aware of the upfront fees and how they may affect your interest rate.

So, roll up your sleeves. Do your research. And find a reliable lender who can save you plenty of cash.


In Case You Missed It

  1. Refinancing your mortgage means paying a lot of the same fees you did when you got your original home loan

  2. The cost to refinance depends on several factors, including your credit score, the current interest rate and the equity you have in your home

  3. A refinance calculator can help you estimate what you’ll pay based on your specific situation

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