The Real Cost of Buying a Home in Maryland: Closing Costs, Taxes, and Fees

Part of: The Complete Guide to Buying a Home in Montgomery County, MD

The down payment is the number everyone focuses on. It's also not the only large number in a home purchase. In Maryland, closing costs on a $600,000 home can add $9,000–$24,400 in additional cash required at settlement — money that needs to be in your account before you get the keys.

Use the calculator above to run your own numbers. Here's a complete breakdown of what you're paying, what's negotiable, and what isn't.

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Maryland Closing Costs: The Full List

Transfer and Recordation Taxes

Maryland has one of the more complex transfer tax structures in the country, split between state and county.

State Transfer Tax: 0.5% of the sale price. On a $600,000 home, this is $3,000 ($1,500 per side at a 50/50 split). For a first-time Maryland home buyer who will live in the home, the rate drops to 0.25% of the full price (there's no price cap) and the seller pays all of it, so the buyer pays $0 (Tax-Property §13-203).

Montgomery County Transfer Tax: 1.0% of the sale price. On a $600,000 home: $6,000 ($3,000 per side at a 50/50 split).

Montgomery County Recordation Tax: Charged on the purchase price (not the loan amount) in marginal tiers: $4.45 per $500 up to $500,000, then $6.75 per $500 from $500,000 to $600,000, with higher tiers above that. On a $600,000 home: $4,450 + $1,350 = $5,800 total, or $2,900 per side.

By default, Maryland law splits all three taxes 50/50 between buyer and seller. At that split, the buyer's share on a $600,000 home is $1,500 + $3,000 + $2,900 = $7,400. In a sale to a first-time Maryland home buyer who will occupy the home, the seller pays all three by default unless the contract expressly says otherwise (Real Property §14-104). The split is negotiable and varies by market conditions. In a buyer's market, sellers sometimes pay all transfer taxes. In a competitive seller's market, buyers often pay their full share.

Lender Fees

• Origination fee: Typically 0.5–1.0% of the loan amount. On a $480,000 loan: $2,400–$4,800.
• Appraisal: $500–$800
• Credit report: $25–$50
• Underwriting/processing fees: $400–$1,200 depending on lender

Title and Settlement

• Owner's title insurance: One-time premium, typically $1,000–$2,500 depending on purchase price
• Lender's title insurance: Required by your lender, typically $500–$1,000
• Settlement/attorney fee: Maryland closing attorneys typically charge $600–$1,200 for residential settlements

Title insurance protects you against title defects the search missed. To do your own preliminary check on the property before relying on the title company, search the land records for Montgomery County MD for recorded deeds, mortgages, and liens — public, free, and often catches issues worth raising before contract.

Prepaid Items

These aren't "fees" exactly — you're paying them anyway as a homeowner, just upfront:

• Homeowners insurance: First year premium upfront, typically $1,200–$2,500 for a $600K home
• Property tax escrow: 2–6 months of property taxes into escrow at closing. At the FY2027 combined rate of about 1.15% ($1.1521 per $100) for a home outside a municipality, a $600K home runs about $6,913/year, so this is roughly $1,150–$3,450 depending on closing date in the tax cycle. On a recently renovated or flipped home, the tax shown on the listing can understate your future bill; see how a flipped home's property taxes can jump.
• Prepaid mortgage interest: Interest from your closing date to the end of the month. If you close mid-month, this is roughly 15 days of interest on the loan.

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Total Closing Cost Estimate on a $600,000 Home in Montgomery County

Category	Low Estimate	High Estimate
Transfer & recordation taxes (buyer's share)	$0	$7,400
Lender fees	$3,500	$7,000
Title & settlement	$2,000	$4,000
Prepaids (insurance, taxes, interest)	$3,500	$6,000
Total	~$9,000	~$24,400

The low tax figure is a first-time Maryland buyer, where the seller pays the taxes by default. The high figure is the buyer's half at a 50/50 split. The wide range also reflects how taxes are split in negotiation, lender variation, and closing date timing.

Rule of thumb: Budget roughly 2.5–4% of the purchase price in closing costs in addition to your down payment, and less if you're a first-time Maryland buyer and the seller pays the transfer and recordation taxes.

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What's Negotiable?

Transfer tax split: In a competitive market, buyers typically pay their share. In a balanced or buyer-favoring market, sellers often pay some or all transfer taxes. This is negotiated in the offer.

Closing cost credits: Buyers can negotiate a credit from the seller at closing to offset some closing costs. This reduces your cash needed at settlement but is factored into the net the seller receives — it's essentially a price reduction structured as a credit.

Lender fees: Shop multiple lenders. Origination fees, underwriting fees, and discount point structures vary significantly between lenders. Getting three Loan Estimates (the standardized disclosure lenders are required to provide) is the only way to compare accurately.

What's not negotiable: State and county transfer tax rates, recording fees, and title insurance premiums are set by Maryland law or standard rate schedules.

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Closing Costs for First-Time Buyers in Maryland

Maryland offers specific protections and programs for first-time buyers:

• Transfer and recordation tax relief: for a first-time Maryland home buyer who will occupy the home, the state transfer tax drops to 0.25% and the seller pays it, and by default the seller also pays the county transfer and recordation taxes. On a $600,000 home that saves the buyer $7,400 compared with a 50/50 split
• Maryland Mortgage Program (MMP): State-sponsored down payment assistance and potentially below-market-rate financing for qualifying first-time buyers
• Montgomery County down payment assistance: The county has specific programs; eligibility requirements and funding availability change — verify current availability

First-time buyer programs in Maryland require that you haven't owned a primary residence in the past three years. If you owned previously but haven't for three or more years, you may qualify again. The transfer tax rule is stricter: it applies only if you have never owned a principal residence in Maryland.

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Frequently Asked Questions

How much are closing costs in Maryland?

For a typical $600,000 home in Montgomery County, plan for roughly $16,400–$24,400 in closing costs on top of your down payment at a 50/50 tax split, or about $9,000–$17,000 if you're a first-time Maryland buyer and the seller pays the transfer and recordation taxes. The range is wide because the tax split and lender fees vary significantly.

Who pays closing costs in Maryland — buyer or seller?

Both parties pay a portion. Transfer and recordation taxes are split 50/50 by default but are negotiable, and for a first-time Maryland buyer the seller pays them all by default. Buyers pay their own lender fees and prepaids. Sellers pay their own settlement costs and the transfer tax portion allocated to them.

Can closing costs be rolled into the mortgage in Maryland?

Most closing costs cannot be financed in a conventional purchase loan. Some lenders offer "no-closing-cost" mortgages that build fees into a higher interest rate rather than upfront cash, but this costs more over the life of the loan. A seller credit is a better tool if you need to reduce upfront cash.

What is a closing cost credit from the seller?

A seller credit (also called a seller concession) is money the seller agrees to pay toward the buyer's closing costs at settlement. It's typically negotiated as part of the purchase offer. Example: a $600,000 offer with a $10,000 seller credit means the seller nets $590,000 and the buyer's cash-to-close is reduced by $10,000.

Are there closing costs on new construction in Maryland?

Yes. New construction has similar closing costs to resale, and in some cases higher due to builder-imposed fees. Builders often have preferred lenders with closing cost incentives — get competing quotes before committing to the builder's lender.

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Planning Your Purchase?

Understanding your true cash requirement — down payment plus closing costs — before you start shopping prevents surprises at settlement. I walk every buyer through this math before we start looking at homes.

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Sources & further reading

Neutral explainers for the contract and closing mechanics here:

• Maryland Real Estate Commission — licensing rules and the disclosure forms Maryland requires
• CFPB — Loan Estimate explainer — how to read a Loan Estimate line by line and compare lenders
• Consumer Financial Protection Bureau — Owning a Home — neutral, lender-independent explanations of every step of financing