What are typical closing costs for a first-time home buyer?
Plan on 2 to 5 percent of the purchase price, on top of your down payment. That’s the range the CFPB and Freddie Mac both publish.
Roughly half of that money is your own insurance, taxes and loan interest, collected early rather than charged as a fee. The rest turns on which state you buy in, because a Massachusetts buyer pays no transfer tax where a New Hampshire buyer pays three quarters of a percent.
What’s Inside the Number?
Federal rules make every lender break the bill into the same buckets. Some are real charges. Originating the loan, the appraisal, recording the paperwork. The rest is money you’d owe with or without a mortgage, handed over early because your loan starts mid-month and the tax bill doesn’t wait.
The CFPB’s own sample paperwork shows the proportions. On its fictional $180,000 purchase, closing costs total $9,712.10, and $2,533.05 is prepaid items plus the opening escrow deposit. A quarter of the bill, and none of it a fee. Here’s that half:
- Your first year of homeowners insurance
- Interest for each day from closing to month end
- Two or three months of property tax, into escrow
- The escrow cushion, capped by federal rules at two months
Knowing which half is which tells you where shopping helps. It also names the one line you shrink by moving a date. Prepaid interest runs per day to month end. Our closing costs calculator does the same split on your own price.
How Much of It Depends on the State?
In Massachusetts, more than you’d guess. The deeds excise runs $4.56 per $1,000, so on a $600,000 sale somebody owes $2,736. That somebody is the seller, because state law puts the tax on “the person who makes or signs the deed.” Your own government line is two flat charges, $155 to record the deed and $205 to record the mortgage. About $360, and the same $360 on a $1.2 million house.
Cross into New Hampshire and it inverts. The rate is $.75 per $100. The statute assesses it to the buyer and the seller separately, which is not the same as splitting it. On a $500,000 house the New Hampshire buyer owes $3,750 and the Massachusetts buyer owes nothing. Maine lands between them, at about 0.22 percent for the buyer’s half.
So the state line swings a first-time buyer’s government charges further than any lender does. Nobody thinks to shop it. Check your own figures against the Closing Disclosure when it arrives.
What Can You Do About It?
Two things, and the second runs backwards from what you’d expect. Shop the services you’re allowed to shop, title first. Your loan requires a lender’s title policy, but the owner’s policy is optional and says so on your disclosure.
Then ask the seller for a credit. The cap comes from the loan program. A conventional loan allows 3 percent of the price above 90 percent loan-to-value, 6 percent from 75.01 to 90, and 9 percent below that. Read it twice. The buyer putting 3 percent down gets the smallest allowance, because the allowance shrinks as your cash does. FHA doesn’t tier it and allows 6 percent at any loan-to-value, which is often why it suits the buyer with the least saved.
You may also have read that Massachusetts lets sellers pay up to 3 percent of a buyer’s closing costs. No such state rule exists. That 3 percent is the federal conventional cap at high loan-to-value, and it applies everywhere.
All three states also fund closing costs directly, as of September 2026. MassHousing’s is a second mortgage rather than a grant, $30,000 deferred at zero percent or $25,000 amortizing, repaid when you sell or refinance. New Hampshire Housing offers a fixed $5,000, $10,000 or $15,000, and MaineHousing’s Advantage $5,000 with no second mortgage.
None of that makes closing costs small. It makes them knowable weeks before anybody asks for a check.