Many borrowers want to know how New York’s mortgage recording tax works on a home loan. They are concerned that closing costs and county rate differences may shape their home loan review. This guide explains what lenders may look for so you can move forward with confidence.
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How Does New York’s Mortgage Recording Tax Affect Your Closing?
SHORT ANSWER
New York charges a tax on your mortgage rather than on your purchase, so the amount you borrow sets what you owe at closing. The rate is built from several separate taxes and it varies by county, running $2.05 per $100 borrowed in New York City and $1.05 in the suburban counties around it. Smart Loan Savings Educational Content
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| New York Mortgage Recording Tax Detail | The Rule or Amount |
|---|---|
| What the tax is charged on | Your loan amount, not the purchase price |
| New York City rate under $500,000 | $2.05 per $100 borrowed |
| New York City rate at $500,000 or more | $2.175 per $100 borrowed |
| Rate in the seven suburban commuter counties | $1.05 per $100 borrowed |
| Basic tax component | $0.50 per $100, paid by you |
| Special additional tax component | $0.25 per $100, paid by your lender on most homes |
| Mortgage recording tax on a co-op purchase | None, because no mortgage is recorded |
| Refinancing without a consolidation agreement | Taxed on the full new loan |
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| New York Mortgage Recording Tax Rule | How This Rule Works on Your New York Home Loan |
|---|---|
| New York Taxes Your Loan, Not Your Purchase | Most state closing taxes attach to the deed and run off the sale price. New York’s mortgage recording tax attaches to the mortgage itself, calculated on the amount secured by it. Your loan amount is the base. Two buyers paying the same price owe different amounts if one borrows more, and a cash buyer owes nothing at all. Putting more money down cuts this cost directly, which is not true of a deed-based transfer tax. This is one of several New York factors worth understanding before you shop, and the rest are covered in our New York mortgage guide. |
| Crossing the City Line Roughly Halves the Tax | The state publishes the rate as a stack of separate components, and the largest one is New York City’s own. Inside the five boroughs, a mortgage under $500,000 carries $1.00 of city tax on top of $0.50 basic, $0.25 special additional, and $0.30 additional, for $2.05 per $100 borrowed. Step outside the city into Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, or Westchester and the city component disappears, leaving $1.05 per $100. On a $400,000 loan that is roughly $8,200 in the city against $4,200 in the suburbs, on identical financing. |
| Your Lender Owes One Piece of It | What people call the mortgage recording tax is several taxes under Section 253 of the New York tax law, and one of them is not yours. State law places the obligation for the special additional tax, $0.25 per $100, on the lender for any mortgage secured by a building with six residential units or fewer. That covers nearly every home purchase. So the $2.05 rate published for New York City is the combined figure, and your share of it is $1.80 per $100 borrowed. Your closing disclosure should reflect that split, and a figure that does not is worth questioning before you sign. |
| Crossing $500,000 Taxes the Whole Loan at the Higher Rate | The state’s rate table steps at $500,000 rather than sliding. A New York City mortgage on a one-, two-, or three-family house or an individual condominium unit securing $500,000 or more is taxed at $2.175 per $100, and that rate applies to every dollar borrowed rather than only to the amount above the line. A borrower at $499,000 and one at $501,000 are not separated by a few dollars. If your loan lands within a few thousand of $500,000, working the numbers both ways into your cash-to-close figure is worth doing before you set the amount. |
| A Co-op Purchase Pays No Mortgage Recording Tax | The tax reaches mortgages recorded against real property, and a co-op is not real property. Buying a co-op means buying shares in a corporation along with a proprietary lease, so your financing is a share loan secured by stock rather than a mortgage recorded against land. Nothing gets recorded and nothing is taxed. The state’s own rate table lists houses and individual residential condominium units, with no line for co-ops, because there is no recorded mortgage to tax. On a New York City purchase that difference runs into thousands of dollars and belongs in any co-op versus condo comparison. |
| A Refinance Can Be Taxed on Only the New Money | Refinancing normally means recording a new mortgage and paying the tax again on the entire balance. New York Tax Law Section 255 offers a way around that through a consolidation, extension, and modification agreement. Rather than paying off the old mortgage and recording a new one, your existing lender assigns the mortgage and the new lender consolidates it, so you pay tax only on the difference between the new loan and the old principal balance. Two conditions govern it. Both lenders have to cooperate, and the arrangement carries its own legal and processing fees, which can outweigh the savings on a smaller loan. Working out what the closing table requires either way is covered in our guide to how to estimate your homebuying budget. |
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| What Lenders Check | How New York Rules Affect Your Loan File |
|---|---|
| Your Loan Amount | The tax is calculated on what you borrow, so a larger down payment reduces it directly while the purchase price stays the same. |
| Your Cash at the Closing Table | The mortgage recording tax is due at recording and cannot be financed into the loan, so it belongs in your cash to close rather than your payment. |
| Where the Home Sits | New York City adds its own tax on top of the state components, so the same loan costs roughly twice as much to record inside the five boroughs as in the suburban counties. |
| Your Property Type | A co-op share loan is not recorded against real property and pays no mortgage recording tax, while a condo or house does. |
| Your Closing Disclosure | State law assigns the special additional tax to your lender on most residential buildings, so that portion should not appear as your cost. |
| Your Home Equity Borrowing | Any mortgage recorded against New York real property triggers the tax, which includes a home equity loan or a line of credit taken later. |
| Your Future Refinance | A consolidation agreement under state law can limit the tax to new money, and it requires both lenders to participate rather than happening automatically. |
| Sources Used on This Page | New York Tax Law Sections 253 and 255 | New York State Department of Taxation and Finance, mortgage recording tax technical memoranda | New York State Department of Taxation and Finance, Form MT-15 | New York City Department of Finance |
| New York home loan guidelines follow federal program standards. Individual lender rules may apply and vary by program. This page is provided for educational purposes only. Smart Loan Savings Educational Content | |
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| People Also Ask | Why These Questions Matter |
|---|---|
| How much is New York’s mortgage recording tax outside the city? | The state publishes a total of $1.05 per $100 borrowed in Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties. Inside New York City the same loan is taxed at $2.05 or more per $100. |
| Who pays the special additional mortgage recording tax in New York? | State law places that $0.25 per $100 on the lender for any mortgage secured by a building with six residential units or fewer, which covers nearly every home purchase. The borrower pays the remaining components. |
| Do co-op buyers pay mortgage recording tax in New York? | No. A co-op purchase finances shares in a corporation rather than real property, so the loan is secured by stock and nothing is recorded as a mortgage against land. |
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