Loan Origination Fee Calculator — Calculate Mortgage Origination Cost [2026]

A loan origination fee is a charge by the lender to cover the cost of processing, underwriting, and funding your loan. It is typically expressed as a percentage of the loan amount (points) or a flat dollar amount. On mortgages it ranges from 0.5% to 1% of the loan amount, though it varies by lender.

Origination fees compensate the lender for processing the loan and do not reduce your interest rate. Discount points are prepaid interest — each point (1% of loan amount) typically reduces your rate by 0.25%. Some lenders bundle both into "points" at closing, so always ask for an itemized breakdown.

Because origination fees are an upfront cost that reduces the money you actually receive while keeping your payments the same, they effectively raise your interest rate. The APR (Annual Percentage Rate) incorporates both the interest rate and certain fees, making it a more accurate comparison metric than the stated interest rate alone.

Yes. Origination fees are often negotiable, especially in competitive mortgage markets. You can ask lenders to waive or reduce origination fees, though they may offset this with a slightly higher interest rate. Getting loan estimates from multiple lenders and comparing APRs is the best strategy.

It depends on how long you plan to keep the loan. No-fee loans often come with higher interest rates, which cost more if you hold the loan long-term. Paying upfront origination fees makes sense if you plan to stay in the home long enough for the lower rate to offset the upfront cost. Use the break-even analysis: divide the fee by the monthly savings from the lower rate.