No-Cost vs Rolled-In Mortgage Fees Comparison Calculator
No-cost mortgages trade a higher rate for the lender covering closing costs. Rolled-in fees finance closing costs into the loan at the lower rate. Compare lifetime cost.
| No-cost loan amount | — |
| No-cost monthly P&I | — |
| Rolled-in loan amount (base + closing) | — |
| Rolled-in monthly P&I | — |
| No-cost total payments over hold | — |
| Rolled-in total payments over hold + balance left | — |
No-cost mortgages and rolled-in fees offer two ways to handle closing costs. A no-cost mortgage charges a higher interest rate in exchange for the lender paying all closing costs at closing. A standard mortgage with rolled-in fees finances the closing costs into the loan balance at the lower rate. The right choice depends on how long you keep the loan: no-cost wins for short holds, rolled-in wins for long holds.
How No-Cost Mortgages Work
'No-cost' is a misnomer — the costs still exist, but the lender pays them at closing using yield spread premium (YSP), then recovers the money over time through your higher monthly payment. Typical rate premium: 0.125-0.375% above the standard rate. The advantage: zero out-of-pocket at closing (beyond down payment and prepaids). The disadvantage: you pay the higher rate for the life of the loan. If you refinance or sell within 3-5 years, no-cost is almost always cheaper because you avoided the upfront expense. Hold the loan 7+ years and the rolled-in option pulls ahead.
When to Roll Fees Into the Loan
Rolling closing costs into the loan keeps your rate at the standard market rate but increases the loan balance by the closing cost amount. Over a long hold (7+ years), the savings from the lower rate exceed the extra interest on the financed closing costs. This option requires you to have enough equity (or down payment) so that rolled-in fees don't push you above 80% LTV (which would trigger PMI). For purchase loans with 20% down, rolled-in fees usually stay under the 80% LTV threshold. For refinances, check the LTV math carefully before choosing.
Last updated May 2026. Sources: CFPB Mortgage Guide.