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Mortgage Origination Fee: How To Compare Lender Charges

Compare fees and mortgage rates among lenders to find the best deal.

Robin Rothstein
Barbara Marquand
Chris Jennings
Updated
A mortgage origination fee is an upfront fee a lender charges for processing a loan. The fee is part of the closing costs you pay when the mortgage is finalized.
Like mortgage rates, origination fees vary among lenders, so it pays to shop around. Mortgage origination fees tend to range between 0.5% to 1% of your loan amount. On a $350,000 mortgage, that would be between $1,750 and $3,500.
» MORE: Find the best lenders with low origination fees

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How to spot origination fees

You can see how much a lender will charge by checking the Loan Estimate, an official document that spells out the terms and projected costs of the mortgage. The lender must provide a Loan Estimate within three business days after you apply.
The lender fees are detailed on the left side of Page 2 under "A. Origination Charges." Sometimes instead of charging a single origination fee, lenders will divide the fee into fee categories, such as:
  • Application fee
  • Processing fee
  • Underwriting fee
  • Verification fee 
When itemized, each fee may look inconsequential, especially compared to the size of your loan — but don't let that confuse you. Be sure to check the total amount of origination charges when comparing fees among lenders.
» MORE: What are mortgage closing costs?

How to compare lender fees and rates

Lenders make money by charging interest and fees. Sometimes they charge higher fees to lower their advertised rates, or they might advertise low — or no —fees but charge more interest.
To get a true look at the cost of borrowing, check the mortgage offer's Annual Percentage Rate, or APR. The APR, which is listed on Page 3 of the Loan Estimate, includes the interest rate, origination fees and discount points and provides an apples-to-apples way to compare lenders.
Page, Text, Document
Page 3 of a sample Loan Estimate on the Consumer Financial Protection Bureau's website
Did you know...
Mortgage points, also known as discount points, are optional fees you pay upfront to reduce the interest rate.
Frequently Asked Questions
Can you negotiate mortgage origination fees?
You can always ask a lender to reduce or waive some of the origination charges, but lenders may not budge. The best way to get a good deal is to apply with more than one mortgage lender, compare Loan Estimates and choose the lowest-cost offer.
Can you avoid paying mortgage origination fees altogether?
Yes, one option is to accept a higher interest rate in exchange for the lender waiving the fee. While this typically means you’ll end up paying more in interest over the life of the loan, it can still work in your favor if you plan to refinance within a few years — especially if the added interest costs are lower than the origination fee.
Another possibility is to negotiate the fee as a seller’s concession. For instance, if it’s a buyer’s market, the seller is in a hurry, or the home has been listed a while and gone unsold, the seller may agree to cover this cost to move the deal over the finish line.
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