Free Loan Origination Fee Calculator

Calculate the loan origination fee charged by lenders for processing a new mortgage application.

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Total Origination Fee

$4,000

Percentage-Based Fee$3,500
Total Fee as % of Loan1.14%
Monthly Mortgage Payment$2,328.56
Fee Spread Over Loan Life (per month)$11.11

Total Origination Fee vs Loan Term

View formula & how it works →

Loan Origination Fees

The origination fee compensates the lender for evaluating, processing, and approving your mortgage application.

Components

  • Percentage fee: Typically 0.5% to 1.5% of the loan amount
  • Flat processing fees: Additional administrative charges ($300-$900)

    • Negotiation Tips

  • Origination fees are negotiable; always ask for a reduction
  • Compare the total fee across multiple lenders, not just the percentage
  • A lower origination fee may come with a higher interest rate (and vice versa)
  • Some lenders advertise no origination fee but build the cost into the rate

    • Tax Treatment

    Origination fees (points) paid on a purchase loan are generally tax deductible in the year paid. On a refinance, they are deducted over the loan life.

    Example Calculation

    A $350,000 loan with 1% origination fee plus a $500 flat processing fee.

    1. 01Percentage-based fee: $350,000 x 1% = $3,500
    2. 02Flat processing fee: $500
    3. 03Total origination fee: $3,500 + $500 = $4,000
    4. 04Fee as % of loan: $4,000 / $350,000 = 1.14%
    5. 05Monthly mortgage payment: $2,328.56
    6. 06Fee spread over 360 months: $4,000 / 360 = $11.11/month equivalent

    Frequently Asked Questions

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