Loan Origination Fee

Definition

A loan origination fee is a charge by a lender for processing a new loan application, covering underwriting, document preparation, and administrative costs. The fee is typically expressed as a percentage of the total loan amount, usually 0.5% to 1% for mortgages. Origination fees are part of your closing costs and are negotiable; some lenders may waive or reduce the fee in exchange for a slightly higher interest rate.