State-by-State Mortgage Refinance Closing Costs Show Wide Gaps

LodeStar Software Solutions’ latest analysis shows that the average refinance loan in the United States is $330,622, with total closing costs averaging $2,207 (0.67 % of the loan). New York tops the list with closing costs of $10,553, or 2.06 % of the refinance amount. Florida follows at 1.36 % ($5,250). A second report places Oklahoma (1.13 %), Pennsylvania (1.01 %) and Texas (0.96 %) among the next highest-cost states. At the low end, California’s costs are 0.32 % of the loan, South Dakota 0.35 %, and Arizona 0.37 %.

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Refinance applications rose 14.9 % year-over-year through early May, spurred by a decline in the 30-year fixed-rate mortgage to 6.36 %—still above 6 % after the U.S.–Israel strikes on Iran reversed earlier gains. Haver Analytics supplied the application data, while LodeStar compiled state-level closing-cost figures based on fees, recording charges and transfer taxes.

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• LodeStar Software Solutions – provider of the closing-cost dataset.

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• Ron Carvalho – Director of Data at LodeStar, spokesperson for the study.

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• Kyle Bass – Production Business Manager, Refi.com, offering market commentary.

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• Haver Analytics – source of weekly refinance-application statistics.

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• National average closing cost: $2,207 (0.67 % of loan).

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• Median closing-cost share: 0.65 %.

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• Highest-cost state (NY): $10,553 (2.06 %).

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• Lowest-cost state (CA): 0.32 % of loan amount.

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• Transfer-tax-heavy states (NY, FL, MD) consistently rank at the top, while states with minimal or no transfer taxes (CA, SD, AZ) rank at the bottom.

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Higher closing costs can erode the savings from a lower interest rate, especially for borrowers with modest equity. In high-cost states, the extra $8,000-$10,000 in fees may offset the benefit of a 0.2-percentage-point rate drop, prompting some owners to explore alternatives such as HELOCs or home-equity loans.

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Ron Carvalho noted that the rankings “largely align with what industry participants would expect,” emphasizing the role of state-level mortgage taxes, recording fees and related structures. Kyle Bass cautioned that while cash-out refinances can help certain borrowers consolidate debt, many are turning to HELOCs to preserve existing low-rate mortgages.

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Bass’s assessment reflects a growing skepticism about refinancing when rates climb. He suggests that homeowners with favorable original rates may achieve greater financial flexibility by tapping home equity through revolving credit lines rather than incurring high closing-cost outlays.

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• Top-five listings differ: One source lists Oklahoma, Pennsylvania and Texas among the highest-cost states, while another mentions only New York and Florida above the 1 % threshold.

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• Maryland’s position: Carvalho’s quote cites Maryland as a top state, yet it does not appear in the numerical ranking tables.

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• Purchase-vs-refinance costs: The reports focus on refinance fees; comparable data for purchase transactions are limited.

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• “The state-by-state ranking largely aligns with what industry participants would expect,” — Ron Carvalho, Director of Data, LodeStar

Newsweek

• “New York, Florida, and Maryland appearing at the top is not surprising, as refinance closing costs are heavily influenced by each state’s mortgage taxes, recording, and related fee structure,” — Ron Carvalho, Director of Data, LodeStar

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• “For many homeowners who locked in low first-mortgage rates during the pandemic era, a higher-rate cash-out refinance may make sense for a specific segment of borrowers, particularly those looking to consolidate debt or simplify their finances into a single loan,” — Kyle Bass, Production Business Manager, Refi.com

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• “closing costs are lowest in states without transfer taxes, or with minimal transfer taxes,” — LodeStar report

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LodeStar plans to release a follow-up study later this year that will incorporate any changes to state transfer-tax legislation. Homeowners and lenders are expected to monitor these updates closely as they weigh the trade-off between rate reductions and upfront closing-cost burdens.

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