Closing Costs in Tennessee: Indebtedness Tax + Moderate Total

Tennessee has below-average closing costs (1.5-2.5% of home price). The state’s mortgage indebtedness tax is 0.115% (buyer-paid). No state income tax. Property tax effective rate is moderate (0.71%). No attorney requirement.

Use the calculator below — your state has already been selected. Adjust the home price, down payment, and loan type for an estimate calibrated to Tennessee.

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Estimates only — your actual closing costs depend on lender, property, locality, and the specifics of your transaction. Not financial advice. Verify all figures with a licensed lender or attorney. See our methodology below.

TN closing cost structure

1. Mortgage Indebtedness Tax

$0.115 per $100 of mortgage amount (0.115%), paid by the buyer. On a $250K mortgage, $288.

2. Real Estate Transfer Tax — seller pays

$0.37 per $100 (0.37%), seller-paid by convention.

3. Moderate property tax

TN effective rate is 0.71%. On a $300K home, $2,130/year. 3 months at closing: $533.

4. No attorney required

TN uses title agent / settlement company model.

How to reduce TN closing costs

  1. Negotiate seller concessions.
  2. Shop title insurance.
  3. Get three Loan Estimates.
  4. Watch HOA fees in Nashville and Memphis area condos.
  5. Verify the indebtedness tax on your Loan Estimate — should appear clearly.

Frequently asked questions (Tennessee)

What is Tennessee's indebtedness tax?

A 0.115% tax on the mortgage amount, paid by the buyer. Calculated only on the loan, not the home price. On a $250K mortgage, that's $288.

Does TN require an attorney?

No. Tennessee uses title agent / settlement company closings. Attorney is optional.

Who pays the TN transfer tax?

By convention, the seller. The state real estate transfer tax is $0.37 per $100 of home value (0.37%).

Closing costs on a $300K Tennessee home?

Approximately $5,000-$7,500 for the buyer. Title insurance ($1,500), prepaid escrows ($1,000), indebtedness tax ($270), lender fees ($2,250).

About these estimates

The calculator above uses Tennessee state averages for transfer taxes, recording fees, title insurance, attorney requirements, and property tax rates — sourced from the Tennessee Department of Revenue, the 2024 ClosingCorp survey, the Tax Foundation 2024 property tax rankings, and state-specific regulatory tariffs. Real closing costs depend on your specific lender, the property, and the county-level rules where you're buying. For a sanity check on the calculator's output, request a Loan Estimate from your lender (federal law requires one within 3 business days of mortgage application).

Related

Reviewed by the CalcCottage editorial team. Updated May 14, 2026. Estimates only — not financial advice.

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