How Much Does It Cost to Refinance a Mortgage?

Written by Banks Editorial Team
3 min. read
Written by Banks Editorial Team
3 min. read

The eventual cost to refinance a mortgage in the United States will vary depending on your principal loan amount, lender, credit score, and current interest rate. However, the various fees that make up the eventual cost are spread across refinancing loan costs, insurance costs, property-related costs, and refinancing closing costs, respectively.

How much it costs to refinance a mortgage in the United States varies. Thus, before you make the final decision to refinance your home loan (and take advantage of opportunities to save thousands of dollars), it is imperative to consider what it would cost you. The eventual cost depends on your interest rate, credit score, lender, and principal loan amount. However, there are various fees applicable. So, to determine if refinancing will be a cost-effective endeavor for you, we explore the different costs associated with mortgage refinancing and the average amount you should expect to pay for each in this article.

Get a Home Loan or Refinance Your Mortgage

Costs Overview

Cost to Refinance a Mortgage 1: Loan

One cost to refinance a mortgage is the application fee. As well as the loan origination fees:

  • Application Fee: To review your refinancing application, a lender will charge you right of the bat. This fee covers your credit check and the underwriting analysis of your application. In the US, whether your refinancing application is accepted or denied, you’ll still pay the loan application fee.
    • Cost: US$75 to US$300.
  • Loan Origination Fee: Regarding how much it costs to refinance a mortgage in the US, the loan origination fee would likely be the most significant one you’d get to pay. This fee covers the lender’s job of processing your mortgage application.
    • Cost: Between 1% and 1.5% of your principal loan amount. (For example, if your principal loan amount was US$100,000, you should expect to pay between US$1,000 and the US $1,500).

Cost to Refinance a Mortgage 2: Insurance

Insurance means an add-on cost to refinance a mortgage, including flood certification, title search, title insurance and private mortgage insurance fees:

  • Flood Certification Fee: The lender uses this fee to hire a company to verify your home location and certify that it is not in a flood zone. After the verification, if your home is found to be in a flood zone, you’d need flood insurance.
    • Cost: US$50 to US$150.
  • Title Search Fee: This fee goes to a title company, whose job is to review property records and certify the rightful owner of the property you’re applying to refinance and check for existing liens.
    • Cost: US$200 to US$400
  • Title Insurance Fee: When refinancing your home, you can maintain the existing title insurance that covers you; however, you would need another policy to cover your lender. Thus, two title insurance is what you’ll need: one to protect your lender if the information found from the title search is not correct, and one to protect you.
    • Cost: US$400 to US$800.
  • Private Mortgage Insurance (PMI) Fee: If you’re refinancing below a certain percentage of equity in your home (anything below 20%), you’ll need to provide private mortgage insurance (PMI) to your lender, until you reach the required threshold.
    • Cost: 0.5% to 1.5% of the principal loan amount.

Get a Home Loan or Refinance Your Mortgage

Survey, inspection and appraisal report fees are things to consider too when calculating the cost to refinance a mortgage:

  • Survey Fee: The final cost to refinance a mortgage includes some substantial property-related fees. The survey fee is what you’ll pay to a surveyor to visit your home, check the boundaries of your property, and map out the features and structures of your property.
    • Cost: US$150 to US$400
  • Inspection Fee: This fee covers the cost of hiring a home inspector to assess the state of your property including wiring, roofing, susceptibility to pests, and other structural issues.
    • Cost: US$175 to US$350
  • Appraisal Report Fee: For a certified appraiser to examine your residence, compare its condition and features with similar homes, and finally determine its market value, you’ll need to pay an appraisal report fee.
    • Cost: US$300 to US$700

Cost to Refinance a Mortgage 4: Closing

To get a final and accurate cost to refinance a mortgage, find below document preparation, attorney, database recording, government loan and prepayment penalty fees:

  • Document Preparation Fee: It takes a lot of legal paperwork to close a mortgage refinancing application successfully. Thus, be prepared to pay for necessary documentation, which takes time.
    • Cost: US$200 to US$500
  • Attorney Fee: You’ll need an attorney, which is an inevitable cost to refinance a mortgage in the US. Attorneys can also act as the closing agent for your mortgage refinancing. They will likely review your prepared documents to check for the legality and adjust the final closing day figures.
    • Cost: US$500 to US$1,000
  • Database Recording Fee: Since the sales and refinances of homes in the US are a matter of public records; this fee covers having your loan information inserted into the appropriate databases.
    • Cost: US$25 to US$250
  • Government Loan Fees: If you’re refinancing a government-sponsored loan, such as those provided through the Department of Veterans Affairs (VA) or Federal Housing Administration (FHA) Streamline program, you may not pay some traditional refinancing fees. However, you may be required to pay for additional costs (like the VA Funding Fee).
    • Cost: Upwards of several thousand dollars
  • Prepayment Penalty Fee: When you refinance your home, you’re paying off an existing mortgage and signing up for a new one. Hence, your present lender (before the new refinance takes effect) is denied the benefits payable to them over the tenure of the former loan. Therefore, you may be required to pay a penalty fee for terminating your mortgage before the stipulated term.
    • Cost: Flat fee of 2 to 5% of your current mortgage balance, or a percentage of the expected interest payments (usually about 80% of 6-months’ interest amount on the current loan balance).


On average, expect to shell out up to US$4,345 to refinance your mortgage, but your exact cost would depend on the lender you choose to work with. Also, the right lender can identify perfect refinancing opportunities to help you save thousands of dollars. Need a lender that’s perfect for you? Check our list of readily-available and certified lenders here.

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