By Andrew Borchini · January 2026
Understand the cost of financing a condo or house and the questions that could save you money.
If you are financing a condo or house in New York City, mortgage recording tax can add tens of thousands of dollars to your closing costs. On a $2 million condo with 20% down, the buyer’s tax is approximately $30,800.
Some buyers can reduce that expense through a purchase CEMA, an arrangement that preserves an existing mortgage rather than paying it off and starting entirely from scratch. The opportunity depends on the property, the lenders and the costs involved. It is worth investigating early.
How much is NYC mortgage recording tax
For a typical residential condo or one- to three-family house financed through an institutional lender, the buyer’s share is 1.8% of a mortgage below $500,000 and 1.925% of a mortgage of $500,000 or more. The rate applies to the loan amount, not the purchase price.
The lender generally pays a separate 0.25%. You may therefore see total rates of 2.05% and 2.175% in official tables. Those totals include the lender’s portion.
Purchase price | Mortgage with 20% down | Buyer tax estimate |
|---|---|---|
$1,500,000 | $1,200,000 | $23,100 |
$2,000,000 | $1,600,000 | $30,800 |
$3,000,000 | $2,400,000 | $46,200 |
These planning estimates use 1.925%, without a CEMA or any applicable small residential adjustment. Ask your attorney for the exact calculation for your property and loan.
Mortgage recording tax is separate from mansion tax. Financing determines the mortgage tax; the purchase price determines mansion tax. Our NYC buyer closing costs guide explains how both fit into your budget.
Do co-op buyers pay mortgage recording tax
An ordinary co-op share loan does not incur mortgage recording tax because you are buying shares in a corporation rather than receiving a deed to the apartment. An all-cash purchase also avoids this tax because there is no mortgage to record.
That does not eliminate other transaction expenses. Co-op buyers still have lender and building charges where applicable, and mansion tax can apply to both co-ops and condos. See our co-op versus condo guide for the broader differences.
What is a purchase CEMA
CEMA stands for Consolidation, Extension and Modification Agreement. In a purchase CEMA, the seller’s existing mortgage is assigned and combined with any additional borrowing you need. When the arrangement qualifies, mortgage recording tax applies to the new debt rather than taxing the preserved mortgage balance again.
For example, if your new loan is $1.6 million and $800,000 of the seller’s existing mortgage can be preserved, the potential buyer tax savings are approximately $15,400 at a 1.925% rate.
You still negotiate your own loan terms. A purchase CEMA does not give you the seller’s mortgage interest rate.
Calculate the savings after fees
The tax savings are the starting point. Additional lender, assignment, document and attorney charges can reduce the benefit. The seller may also negotiate a share of the savings.
Using the example above, suppose the additional CEMA costs total $3,000 and you agree to allocate $4,000 to the seller. Your $15,400 potential tax savings would leave approximately $8,400 in net savings. Those fees and the seller allocation are assumptions for this example; ask for written figures for your transaction.
Compare the full loan offers, too. A higher interest rate or larger lender fees could outweigh the CEMA benefit. Your lender and attorney should confirm the eligible mortgage balance, tax treatment and final costs.
Ask about a CEMA before signing the contract
Start by asking whether the seller has a mortgage and whether the existing lender will assign it. Then ask your own lender whether it supports purchase CEMAs and what it charges.
Have your attorney confirm the documents, timing and proposed allocation of savings. Both lenders and the seller need to cooperate. A mortgage that has already been paid off generally cannot provide the same opportunity, and an assignment can add time to the transaction.
An existing mortgage is only a lead to investigate. Do not count on the savings until your lender and attorney have confirmed that the arrangement can work.
Other ways to manage the cost of buying
A smaller mortgage reduces mortgage recording tax, but it also requires more cash upfront. Consider the effect on your reserves and overall financing costs before increasing your down payment. Our guide to cash needed to buy an NYC apartment can help you organize that budget.
A BRN commission return can also help with your overall purchase costs. You work directly with our senior partners, never pay BRN a brokerage fee and receive half of the commission we receive, up to 1.5% of the purchase price. Our compensation comes from the seller.
We send you a check or wire the money to you right after closing, once BRN has received its commission. If you prefer, we can work with your lender and attorney to apply the return toward eligible closing costs. The return does not change the mortgage recording tax due.
Contact Us to discuss a condo or house you are considering and the costs to investigate before making an offer.
Your attorney and lender should confirm the transaction-specific calculation. Speak with your own tax advisor; BRN does not provide individual tax advice.
