What are the main closing costs when refinancing in Maryland?

Refinance closing costs in Maryland fall into the standard four categories — lender charges (origination, application, processing, underwriting), third-party services (appraisal, credit report, title), prepaids (taxes, insurance, prepaid interest), and government recording — plus the state's mortgage recording tax that scales with the loan amount. The recording tax is what makes Maryland refinances meaningfully more expensive than the national average.

Do I pay transfer tax on a refinance in Maryland?

No — Maryland exempts refinances from transfer tax. Transfer tax applies when property changes hands, not when the loan changes. The closing agent should not include any transfer tax line on a refinance LE in Maryland; if one appears, push back.

Is title insurance discounted on a refinance in Maryland?

Yes — title insurance reissue rates are generally available on refinances in Maryland. The discount is typically 30 to 70 percent off the standard lender's policy premium when the prior title work is recent enough to qualify. The catch: the borrower usually has to ask. Closing agents do not always apply the reissue rate automatically — request it in writing before closing.

What is § 12-108(g) Refinance Exemption and how can it help on a Maryland refinance?

Statutory exemption: recordation tax does not apply to the portion of a refinanced mortgage that does not exceed the unpaid principal balance of the original loan at the time of refinancing. Borrower pays recordation tax only on cash-out / new money. On a $400K rate-and-term refi in Montgomery County (rate $4.45/$1,000): full tax would be $1,780; with exemption (no cash-out): $0. Savings scale with loan size and county rate.

How much can I save by negotiating refinance closing costs in Maryland?

Most Maryland refinance borrowers save $500 to $2,500 by actively negotiating lender fees and shopping title — and often more on larger loans. The largest single source is the origination charge in Section A, which is typically negotiable by 25 to 50 percent against a competing Loan Estimate. Title and settlement services in Section C can usually be shopped for additional savings.

Refinance Closing Costs in Maryland: Rules & Fees

Overview

The defining cost of a Maryland refinance is the mortgage recording tax — a per-thousand levy on the new loan amount that adds significantly to closing in addition to standard lender and title fees. On large refinances, the tax line alone can reach four figures.

Maryland is one of only a few states with a refinance-specific mechanism that meaningfully reduces this tax: § 12-108(g) Refinance Exemption. Whether you qualify depends on the existing mortgage structure and how the new loan is documented; getting it right means asking early.

What follows: the tax structure, the § 12-108(g) Refinance Exemption mechanism, the title reissue discount, and what we see consistently on Maryland Loan Estimates that borrowers should push back on.

One Maryland-specific pattern worth flagging in advance: missing refinance affidavit. The detailed callouts further down cover the mechanics. Worth knowing: Maryland's § 12-108(g) refinance exemption is highly consumer-friendly but requires the refinance affidavit — verify it is referenced on the CD's recordation tax line. Refinance affidavit is the borrower's primary lever to avoid recordation tax. The settlement agent prepares it; borrower should verify it was filed. Title underwriters active in the state include First American, Fidelity, Stewart, Old Republic — all file in MD.

Where the audit fits

When the Maryland-specific items are settled, the largest remaining negotiation lever is the lender's own fee structure. Fair Loan Check Full Analysis ($39) benchmarks the origination charge for your loan size, identifies the Section C services worth shopping, and writes a counter-offer email from your specific Loan Estimate.

Mortgage recording tax

Maryland recordation tax is charged on the recording of mortgages and deeds of trust at county-set rates ($5–$12 per $1,000 of debt secured). Under Tax-Property § 12-108(g), refinances are EXEMPT from recordation tax up to the unpaid principal balance of the original loan, when refinanced by the original mortgagor. Tax is owed only on the increase (cash-out) above the prior unpaid balance. Effective July 1, 2013, this exemption was expanded beyond principal residences to include investment and commercial properties.

Maryland's refinance exemption is one of the most consumer-friendly in the country, but requires the affidavit. This is the #1 thing a MD refi borrower needs to verify is on the CD.

Transfer tax on refinance

Maryland exempts refinances from transfer tax. Transfer tax applies when property changes hands, not when the loan changes. MD transfer tax (state + county) only applies to deeds. Refinances do not transfer title and pay no transfer tax.

Exemption statute: Md. Code Tax-Property Title 13. State and county transfer taxes apply to instruments transferring an interest in real property. A deed of trust given to secure debt is not a transfer of an interest in real property and is not subject to transfer tax.

Title insurance reissue rate

MD title insurance rates are filed by underwriters with the Maryland Insurance Administration. Reissue rate available on owner's policy when prior owner's policy is provided; refinance rate available on lender's policy on refinance regardless of policy age (when prior policy provided). Typical refinance rate is approximately 60% of the original-issue lender's policy rate.

Typical discount on the lender's policy: 25–60% off (typical 40%).

Lookback period: Most underwriters: prior policy within 10 years for owner's reissue. For lender's policy on refinance, no time limit at most underwriters when prior policy is produced.. Documentation required: Copy of prior owner's or lender's title insurance policy..

MD has historically been stricter than VA/DC — borrowers must produce the prior policy or actively request the reissue/refinance rate. This is one of the most commonly missed savings on MD refinances.

Maryland refinance gotchas

Patterns we see consistently on Maryland refinance closings, sorted by how actionable they are:

Sources

Md. Code Tax-Property § 12-108(g) (refinance recordation tax exemption)
Md. Code Tax-Property § 12-105(f) (supplemental instrument)
Md. Code Tax-Property § 12-101 et seq. (recordation tax generally)
Maryland Recordation and Transfer Tax Guide 2025 (MSBA Real Property Section)
Maryland Courts — Recording Fees and Taxes (mdcourts.gov)
JGL Law analysis of 2013 amendments expanding refinance exemption to commercial/non-principal residence
LodeStar 2024 Refinance Closing Cost Report (MD ranked among top 5 states for refinance closing costs)

Ready to apply this to a real Loan Estimate? Audit your refinance LE for padded lender fees and get a counter-offer email drafted from your specific numbers.

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Refinancing in Maryland? Here's what you'll actually pay.