On a $320,000 refinance, 2% is $6,400 and 5% is $16,000. That spread is why two quotes with the same rate are not the same deal. Lender fees move; third-party and government fees move less.
| Fee | Typical range | Notes |
|---|---|---|
| Origination / underwriting | 0.5%–1.5% of the loan, or a flat $1,000–$2,500 | Most negotiable line on the estimate. |
| Discount points | 0–3% of the loan | Optional. One point is 1% of the loan and often buys about 0.25% off the rate, not a guarantee. |
| Appraisal | $300–$1,000 | Higher for complex or high-value homes. |
| Title and settlement | $300–$2,000+ | Varies widely by state. |
| Recording / taxes | $20 to several thousand | Some states charge mortgage or intangibles tax on refinances. |
| Credit report | Usually under $50 | Small but standard. |
| Prepaid interest | A few days to a month of interest | Depends on the closing date, not a lender profit center in the same way. |
No-cost is a pricing choice
A “no closing cost” refinance usually means the lender credits fees in exchange for a higher rate. That can be smart if you will move soon: you skip a cash outlay and never recoup a big fee. It is often expensive if you will keep the loan for a decade. Model the credited quote and the lower-rate quote with cash fees. The break-even guide explains which number to trust.
Pay cash or roll it in
Paying costs in cash keeps the new principal smaller and makes cash break-even easy to read. Rolling costs into the loan preserves cash and raises interest. Check the box on the calculator to switch. If you roll points in, you are financing the fee that was supposed to buy a lower rate — make sure the rate drop still wins.
How to enter costs on hrc.io
- Start with the “Use 2% of the loan” helper if you do not have a quote yet.
- When a Loan Estimate arrives, put origination, appraisal, title, recording, and other lender/third-party fees into closing costs. Put discount points in the points field as a percent of the loan.
- Leave prepaid taxes and insurance out of closing costs if you already pay them through escrow — they are not a refinance penalty so much as a timing item.
Worked example: $6,400 on a $320,000 loan
Two percent of $320,000 is $6,400. That is a reasonable sketch before a Loan Estimate arrives — not a promise. If the new payment is $200 lower on principal and interest, simple cash break-even is 32 months. If your stay horizon is shorter than that, press the lender on origination fees, ask for a credit, or consider a true no-cost structure and accept the higher rate for a short hold.
Suppose Lender A quotes 2% total costs in cash and a rate you like. Lender B quotes “no closing costs” with a rate 0.25 to 0.375 points higher. For a two-year stay, Lender B may win because you never write the $6,400 check. For a ten-year stay, Lender A often wins because you stop paying the higher rate long after the fee is recovered. Keep the stay horizon identical when you plug both quotes into the calculator.
What belongs in the fee field — and what does not
Include lender origination, underwriting, processing, appraisal, credit report, title, settlement, recording, and any discount points you will pay (points can also sit in their own field as a percent). Exclude amounts that simply refill escrow for taxes and insurance you would pay anyway, unless you want the cash-at-closing picture to match the Closing Disclosure dollar for dollar. Prepaid interest is a gray area: it is real cash at closing, but it is mostly timing. If you include it, include it consistently across quotes.
Transfer taxes and mortgage taxes vary by state and can dominate the fee stack on a refinance. Do not assume a national 2% average applies in a high-tax county; replace the sketch early.
Pitfalls
- Comparing rates without lining up the fee columns on the Loan Estimate.
- Treating lender credits as free. Credits are paid for with rate.
- Rolling points into the loan and then forgetting you financed the buy-down.
- Using 5% costs as a scare number or 0% as a dream number when your market sits near 2%–3% for a plain rate-and-term deal.
- Ignoring that cash-out quotes often price a little richer than rate-and-term on the same property.
Shopping three Loan Estimates
Ask each lender for a Loan Estimate on the same day when you can, with the same target rate or the same cash-to-close goal, so the forms are comparable. Line up Section A (origination), points, and lender credits. Then line up third-party fees. Small differences in appraisal or title are normal; large gaps in origination are where negotiation lives.
After you pick a direction, re-enter the winner’s fees in the calculator and re-check break-even and stay-horizon net. If the estimate changes before lock — fees up, credit down — update the model. A refinance that looked fine at $6,400 of costs may fail at $9,000 with the same rate.
Remember the 2% to 5% band is a sketch for a typical rate-and-term refinance. High recording taxes, odd property types, or rush appraisals can push you toward the top of that band. Government streamlines sometimes land lower on third-party fees but still require you to confirm recoupment rules and the Closing Disclosure.
Prepaid items vs. lender fees
Borrowers often blur prepaid interest and escrow deposits with the cost of refinancing. Escrow deposits are mostly your own money set aside for taxes and insurance. Prepaid interest covers the days between closing and month-end. Lender and title fees are the franchise cost of replacing the loan. When you tell someone “refinancing cost me $12,000,” separate those buckets so you know how much was friction and how much was calendar math.
Related questions
Once costs are entered, read break-even so you know when the fee is recovered. For whether to refinance at all this year, see when to refinance. For loan types and term resets, see how refinancing works.
Fee tables here are typical ranges for planning, not a quote. Confirm every line on a Loan Estimate. hrc.io is not a lender; estimates stay in your browser and no sign-up is required.
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