What is a no-closing-cost mortgage or refinance?
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Short answer
A no-closing-cost loan or refinance still has origination costs. The CFPB says lenders typically cover those costs by charging a higher interest rate and giving a credit, or by adding the costs to the loan balance. Neither path is free.
Full explanation
Every mortgage involves services and costs to originate the loan. Some lenders or brokers advertise no lender fees or no closing costs. That label does not mean the work was free.
The CFPB describes two common methods. One is a higher interest rate paired with a credit that covers the cost of making the loan. The other is adding the closing costs to the amount borrowed. A higher rate means you pay more over time. A higher balance raises payments and reduces equity.
Compare the rate, the loan amount, and cash due at closing—not the advertisement alone.
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Is there such a thing as a no-cost or no-closing cost loan or refinancing?
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Educational summary of public sources. Not personalized advice. The original official source controls where applicable.
Last reviewed
September 10, 2026
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