The costs and fees for mortgage refinancing vary depending on options and your location.
Refinancing a home mortgage can help you save money in the long run, but you should know that there are some upfront costs. It’s hard to provide an average cost to refinance, since the final number varies based on your refinancing type and creditworthiness.
“Sometimes the closing cost is included in the mortgage,” says Jason Lerner, area manager with First Home Mortgage.
Here, we’ll provide a rough estimate of what you should expect to pay to refinance your home mortgage. If you want to skip the expenses altogether, you may want to consider a no-closing cost refinance, though you’ll end up paying for those down the line.
What is the Average Cost to Refinance?
| Fee | Average Cost |
| Application fee* | $200 |
| Appraisal fee* | $500 |
| Title insurance and search | $900 |
| Loan origination fee | About 1% of the principal balance |
| Attorney fees* | $700 |
| Total: | $2,400, plus 1% of loan principal |
* May not be required by some lenders
Most refinancings cost around 2-6% of your total loan value, depending on your creditworthiness and the size of your loan. So, people refinancing a $200,000 mortgage should expect to pay $4,000 to $12,000. Most of that will be due at closing to pay for things like the home appraisal and title search.
Here’s a quick breakdown of the costs associated with refinancing.
Application Fee
Average cost: $200
Before you receive a decision on your refinance, your lender will bill you for the cost of processing your application. The application fee usually covers the cost of a credit check and an underwriting analysis of the financial information you submit with your refinance. Some of the best refinance mortgage companies have eliminated the application fee, but most lenders still charge them in some capacity.
Keep in mind that this fee is due even if you aren’t approved for a refinance, so make sure you meet your new lender’s criteria before you apply.
Appraisal Fee
Average cost: Around $600
An appraisal is a professional estimation of your home's worth. During an appraisal, a home value expert called an appraiser will inspect your home, conduct outside research and assign a value to it.
Lenders require a new appraisal on most refinances. This is because they need to be sure that your home value hasn’t fallen since you bought your house. New appraisals are required on all forms of cash-out refinances.
Title Insurance and Search
Average cost: $900
Title insurance is a type of protection that safeguards both you and your lender from competing claims on the property you’re buying. During a title search, a title insurance company will research the history of the property to ensure that you don’t have any liens or claims on the property that will prevent the lender from seizing it if you default on your mortgage.
When you refinance with a new lender, you’ll usually need to pay for another title search and title insurance policy. The good news is that, unlike other types of insurance, you don’t need to pay for title insurance every month – after you pay for it once at closing, you’re protected for as long as you have your loan.
Loan Origination Fee
Average cost: 1% of the principal balance
Your loan origination fee is typically the largest expense you’ll pay when you refinance your mortgage. The loan origination fee compensates your lender for drawing up the paperwork for your loan, calculating your interest rate and scheduling the inspections and appraisals you’ll need before you can close your refinance.
Attorney Fees
Average Cost: $700
In some states, attorneys must review and approve loan paperwork before you can sign off on your refinance. They might need to review your loan agreement to make sure that it contains no illegal clauses and that your lender has correctly calculated your fees and interest rates. An attorney may also need to be present at the closing table to verify your mortgage refinance.
Attorneys’ fees can vary by state. If your refinance requires them, expect to pay about $700 in these fees.
How to Lower the Cost of Refinancing
There are ways you can effectively lower your refinance rates and potentially save thousands of dollars over the life of your loan. By following these tips and techniques, you'll be able to easily navigate the refinancing process and secure the best possible rates for your financial situation.
Improve Your Credit Score
Lenders typically offer lower refinance rates to borrowers with higher credit scores. Paying off outstanding credit card debt, making payments on time and keeping your credit utilization low can all help improve your credit score and potentially qualify you for a lower refinance rate.
Shop Around and Compare Offers
Different lenders may offer different refinance rates, so shopping around and comparing offers from multiple lenders is essential. This lets you find the best refinance rate and terms that suit your financial needs.
Lerner recommends working with the person who helped you secure your first loan, not necessarily the company.
“That person can give a comprehensive financial examination and give you a good idea of what refinancing would result in,” he says.
Make a Larger Down Payment
Putting down a larger down payment when refinancing can help reduce your loan-to-value ratio (LTV). A lower LTV generally leads to lower refinance rates and may even eliminate the need for private mortgage insurance (PMI) if you have at least 20% equity in your home.
That said, Lerner says removing PMI may not be needed for some people. “There was a time when mortgage insurance was expensive,” he says. “Now, for well-qualified borrower, it’s become incredibly affordable.”
Pay Points Upfront
Paying points upfront is an option to lower your refinance rate. Each point equals 1% of the loan amount and paying points upfront means paying more upfront to reduce your interest rate over the life of the loan. This can be beneficial if you plan to stay home for a long time.
Consider an Adjustable-Rate Mortgage (ARM)
If you plan to sell your home or refinance again in a few years, an adjustable-rate mortgage (ARM) may offer a lower initial interest rate than a fixed-rate mortgage. However, it's important to carefully consider the terms and potential future rate adjustments.
How Much Will You Pay to Refinance?
The average cost to refinance a home mortgage is about 2-6% of the total loan value, though that number can change based on your lender, credit score and other factors. To reduce your refinancing costs, consider repairing your creditworthiness to secure a better interest rate or make a larger down payment.
Why You Should Trust Us
Benzinga has offered investment and mortgage advice to more than one million people. Our experts include financial professionals and homeowners, such as Anthony O’Reilly, the writer of this piece. Anthony is a former journalist who’s won awards for his coverage of the New York City economy. He’s navigated tricky real estate markets in New York, Northern Virginia and North Carolina.
For this story, we worked with Jason Lerner, an area manager for First Home Mortgage and a 22-year mortgage industry veteran.
FAQ
Is it worth it to refinance for 1%?
Refinancing to decrease your interest rate by 1% may be worth it if it significantly decreases your monthly payments. If, on the other hand, you’re close to paying off your home loan, it might be a good idea to stick with your current rate.
How much does it cost to refinance?
On average, refinancing costs about 2-6% of your total loan value, though that number may change based on your loan size, credit score and refinance type.
What is the average refinance rate?
As of this writing in late February 2025, the average refinance rate on a conventional loan was around 6.8% for a 30-year mortgage and 6.1% for a 15-year loan.
Sources
- Jason Lerner, area manager for First Home Mortgage
About Anthony O'Reilly
Anthony O’Reilly is an updates editor for Benzinga. He’s won numerous journalism awards for his coverage of the New York City economy and Long Island school district budgets.