What is a no-closing-cost mortgage?

Short answerA no-closing-cost mortgage has the lender cover your closing costs through a lender credit in exchange for a higher interest rate, or rolls the costs into the loan balance. You still pay them; you just do not pay them in cash at closing.

Reviewed by Juan Fernando Romero, NMLS 2557318Updated October 14, 2026

The details

It fits buyers short on cash and owners who expect to refinance or sell soon. Compare both versions on your Loan Estimate: the credit amount, the rate difference, and how many months until the higher payment costs more than the costs you avoided.

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Related loan programs

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Rate-and-Term Refinance

A rate-and-term refinance replaces your mortgage with a new one to change the rate, the term or the loan type, without taking cash out.

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