Buying a home is expensive, and closing costs can add thousands of dollars to the final price tag. If you're wondering whether it's possible to get a mortgage with no closing costs, the answer is yes — but it comes with trade-offs. In this guide, we’ll explain what “no closing costs” really means, how these loans work, and whether one might be right for your situation.

What are closing costs?

Before diving into the “no closing costs” question, it helps to understand what closing costs are. These are the fees you pay to finalize your mortgage and transfer ownership of the property. They typically total between 2% and 5% of the home’s purchase price and include:

• Loan origination and underwriting fees
• Appraisal and credit report fees
• Title search and title insurance
• Escrow or settlement services
• Recording fees and transfer taxes
• Prepaid property taxes and homeowners insurance

On a $400,000 home, closing costs can easily reach $8,000 to $20,000 depending on your location and loan type.

What “no closing costs” really means

A mortgage with no closing costs doesn’t mean the costs vanish. Instead, they’re shifted or absorbed in one of the following ways:

#1: Lender-paid closing costs

In this structure, the lender covers your upfront fees in exchange for charging you a slightly higher interest rate. This is known as a lender credit. You don’t pay closing costs at the table, but you’ll likely pay more over time in interest.

#2: Seller-paid closing costs

In a buyer’s market — or as part of a negotiated offer — the seller may agree to pay part or all of your closing costs. This is called a seller concession, and it must be written into the purchase contract. While it reduces your out-of-pocket costs, it may require you to offer a higher purchase price or accept other terms favorable to the seller.

#3: Rolled-in closing costs (refinances only)

When you refinance a mortgage, you may be allowed to roll your closing costs into the loan balance. This isn’t truly “no closing costs,” but it does avoid upfront payment. Keep in mind this increases your loan amount and the interest you’ll pay over time.

Pros of a mortgage with no closing costs 

Going with a loan with no closing costs can be a smart move under certain conditions. Here are some key advantages:

• Lower cash needed to close: This is ideal if you’re tight on cash or want to preserve savings.
• Faster path to homeownership: Eliminating upfront fees can help you buy sooner.
• Better for short-term ownership: If you plan to move or refinance in a few years, the long-term cost of a higher rate may not matter much.
• Useful for refinances: Rolling costs into the loan avoids paying out of pocket again.

Cons of a no-closing-costs mortgage

Despite the convenience, there are downsides to be aware of:

• Higher interest rate: Even a small rate increase can cost thousands more over the life of the loan.
• Bigger monthly payments: The rate bump adds to your regular housing expenses.
• Reduced long-term savings: Paying more in interest reduces the benefits of homeownership over time.
• Limited negotiation flexibility: Seller-paid closing costs must fit within allowable limits and may not be available in a competitive market.

When a no closing costs loan makes sense

While not for everyone, a no closing costs mortgage may be the right choice in these situations:

• You plan to move or refinance soon: The shorter your time in the home, the less impact the higher rate has.
• You’re low on cash to close: If you’re choosing between this or not buying at all, this option keeps the door open.
• You’re refinancing for lower payments: Rolling closing costs into the loan allows you to save monthly without an upfront burden.
• You’re buying in a buyer’s market: Seller credits are easier to negotiate when sellers are eager to close quickly.

Just remember: if you expect to keep your loan for more than five to seven years, the total cost of a no closing costs loan will likely exceed what you would have paid upfront.

How to get a no closing costs mortgage

Getting a mortgage with no closing costs starts with the right strategy:

• Compare lenders: Not all lenders offer the same credits or rate structures. Shop around for offers that include lender-paid closing costs.
• Negotiate seller concessions: If market conditions allow, ask your real estate agent to negotiate closing cost credits from the seller.
• Review your loan estimate: This standardized form lists all costs associated with the loan. Look for lender credits or seller contributions under Section J.
• Understand the rate trade-off: Ask your lender to show you side-by-side options — one with closing costs paid upfront and one with a higher rate and lender credit.
• Do the math: Use a break-even calculator to estimate how long it will take for the higher rate to outweigh the upfront savings.

What to watch out for

Not all no-closing-cost offers are created equal. Watch for:

• Junk fees: Some lenders advertise “no closing costs” but still sneak in fees under different names.
• Inflated loan amounts: In a refinance, rolling in fees can increase your principal and total interest.
• Uncompetitive interest rates: Don’t accept a drastically higher rate in exchange for upfront savings — shop other lenders before deciding.
• Loan program limits: Government-backed loans like FHA and VA have specific rules on how and when costs can be shifted or paid by others.

Always read the fine print and ask for a full cost comparison.

Deciding if no closing costs is right for you 

So, can you get a mortgage with no closing costs? Yes — but understand what that really means. You’re not avoiding the costs; you’re shifting how they’re paid. Whether it’s through lender credits, seller concessions, or rolled-in fees, the money still comes from somewhere.

For many buyers and refinancers, this structure can be a useful tool to reduce upfront expenses, especially if they don’t plan to stay in the loan long term. Just be sure to weigh the short-term convenience against the long-term cost and compare your options carefully.

Want to see current mortgage offers to see if no closing costs could be right for you? Compare personalized rates now at Rates.Now and find a loan that fits your budget — upfront and over time.

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