What Is a Loan Origination Fee?

By Kristi Waterworth – Updated Nov 20, 2024 at 9:23 AM

Key Points

Loan origination fees cover admin costs and are around 1% for mortgages, possibly higher for personal loans.
You can finance these fees into your mortgage if your home’s value allows or opt for no-fee options.
Reducing fees may involve choosing fee-free loans, utilizing assistance programs, or negotiating personal loans.

Borrowing money can be a complicated process with lots of moving parts you'll need to track, including things like the loan origination fee. Find out what this is and how it affects your bottom line.

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Stacks of change sit near a small model house as a person writes in a notebook in the background. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.