NYC Closing Costs Explained
Closing costs are the one-time fees due the day you buy — on top of, and separate from, the down payment. In NYC they typically run 2%–6% of the purchase price depending on property type and whether you finance. Here is every line the calculator’s closing-costs tab shows, defined.
Mansion tax
A New York State tax the buyer pays on homes of $1 million or more — 1% at $1M, stepping up through tiers to 3.9% at $25M+. It is a cliff, not a bracket: the rate applies to the entire price, so $999,999 owes nothing and $1,000,000 owes $10,000. See the mansion tax calculator for every tier.
Mortgage recording tax
A tax for recording your mortgage against the property: 1.8% of the loan under $500,000, 1.925% at $500,000 or more (that is the buyer’s share after the lender’s customary 0.25%). It is charged on the loan, not the price — and co-ops don’t pay it at all, because a co-op loan is against shares, not real property, so nothing gets recorded. All-cash buyers skip it too. Details in the recording tax guide; refinancers can dodge most of it with a CEMA.
Title insurance
A one-time premium (roughly 0.45% of the price for the owner’s policy, plus ~0.15% for the lender’s policy when you finance) protecting against defects in ownership — forged deeds, unpaid liens, heirs with claims. Rates are regulated in New York, so quotes barely vary. Co-ops skip it: a cheaper lien search (a few hundred dollars) does the equivalent job.
Discount points (rate buydown)
Optional prepaid interest: 1 point = 1% of the loan, and each point typically buys the rate down about 0.25%. Appears on the closing sheet only if you choose it — the calculator adds this line when you tick “Buy down interest rate.” Whether it pays off depends on how long you keep the loan: the points calculator finds your break-even month.
Bank, appraisal & loan fees
The lender’s own charges for making the loan: application/origination, the appraisal (~$500–$800), credit report, and underwriting. Figure $1,500–$2,500 all-in. These are the most shoppable line — lenders waive or discount them to win business.
Your attorney
In New York, buyers and sellers each bring their own real-estate attorney to contract and closing — typically $2,500–$4,000 for a straightforward purchase. Not legally mandatory, but no NYC deal realistically closes without one.
Board application & building fees (co-ops and condos)
The building’s own charges: board application fees, credit checks, move-in deposits, and managing-agent processing — usually $1,000–$2,000 combined. Co-ops are the heaviest here (the board package), which is fair trade for skipping the recording tax and title insurance.
Sponsor costs (new developments only)
Buying from a developer, custom flips two seller-side taxes onto you: the NYC transfer tax (1.425%) and NYS transfer tax (0.4%, or 0.65% at $3M+), plus the sponsor’s attorney fee (~$3,000). That is why new-dev closing costs run ~2% higher — though in slower markets sponsors often negotiate these away. Ask.
What’s not in the list
Prepaids and escrows — a few months of property taxes and homeowner’s insurance collected up front — are your own carrying costs paid early, not fees. Selling instead of buying? That side has its own sheet: the seller closing costs calculator.
Frequently asked questions
Are closing costs part of the down payment?
No — they are separate cash due at the same moment. A $2M condo with 20% down needs the $400,000 down payment plus roughly $73,000 in closing costs, all at the table.
Why are co-op closing costs so much lower than condo?
Co-ops skip the two biggest items: the mortgage recording tax (a co-op loan is against shares, so no mortgage is recorded) and title insurance (a lien search replaces it). On a $2M purchase that saves roughly $40,000.
How much should I budget for closing costs in NYC?
Roughly 2%–6% of the price: about 1.5–2% for a financed co-op, 3–4% for a financed condo over $1M, and 5–6% for a new development where the sponsor passes the transfer taxes.
Do all-cash buyers pay closing costs?
Yes, but less: no mortgage recording tax, no lender fees, and no lender title policy. The mansion tax, owner’s title insurance, and attorney fees still apply.
Can closing costs be negotiated or financed?
Lender fees are shoppable and sponsors sometimes absorb transfer taxes in slow markets. The taxes themselves are not negotiable. Rolling costs into the loan is generally limited to refinances — purchases require the cash at closing.
Figures computed from official NYC Department of Finance and NYC Open Data records, refreshed automatically — see how BlockBook sources its data. Spot an error? Tell us.
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Informational only — not financial, legal, or tax advice. See the disclaimer.