Closing Costs For Mortgage Loans On The Rise

In addition to the mortgage rates that are on the rise, closing costs are on an upward swing as well.

Over the past year, closing costs including loan-origination and other fees have risen 6%. This means for a 200,000 home the closing fees would be $2,402 for a single-family mortgage where the client had excellent credit with a 20% payment put down. (This is a national average according to

Why are loan origination fees on the rise?

It’s due partly because interest rates are now higher. This means as rates increase, lenders make less profit on the money they lend out, so they look for more profit from fees.

In addition, lending companies have to do more work to underwrite a loan and increases their costs in that aspect as well.

How is the increase in closing costs affecting the market?

So far, there has been a decline in the refinance market. This means that as that market slows down there should be more lender competition on loans and that should help keep the competitive rates on origination fees between lending companies.

According to data from top lending company Freddie Mac, the average interest from on a 30 year fixed loan is up .84% from last year.

What does higher closing costs mean for consumers?

Higher closing costs are an additional reason for consumers to shop around and make sure to compare fees for different loan originators to make sure they are getting a fair deal. Additionally, consumers should keep an eye out for additional underwriting and processing fees. These fees can add up quickly.

What should consumers do when taking out a home loan?

Refinance at
Loan Type

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While it can be confusing with the many different costs associated with closing a loan, there is a way to comparison shop. One way is to ask for a no-cost rate. The quotes received back from this request will lack fees but carry higher interest rates. However, overall, interest rates matter more than fees if a consumer will be staying in the home more than a few years. With time, a lower interest rate will generally save consumers more money.

How does your state stack up in closing costs?

Below are the average closing costs for the highest states in the U.S.:

[link each state to their respective state page as an internal link]

Hawaii – $2,919

Alaska – $2,675

South Carolina – $2,658

California – $2,639

New Mexico – $2,566

Here are the average closing costs for the lowest states in the U.S.:

[link each state to their respective state page as an internal link]

Wisconsin – $2,119

Missouri – $2,188

Kansas – $2, 193

Michigan – $2,203

Washington – $2,208

(The above information from excludes title company fees, property insurance, taxes, association, interest and any other prepaid fees.) is a information source and tool for United States consumers to learn about mortgages and mortgage rates. If you would like to check the mortgage loan rates in your state please click here. [link to internal page for states]



Christian Calvin mortgage Christian is a contributing writer for He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.


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