An origination fee is a percentage of the loan amount charged by lenders or brokers to cover loan processing costs. Typically between 0.5% and 1% of the mortgage, this fee includes services like application processing, underwriting, and funding. Origination fees are usually outlined in the loan’s closing disclosure and may be negotiable, although reducing them can increase the loan’s interest rate. Borrowers should factor in these fees when comparing loan offers, as they impact the overall cost. Using mortgage calculators can aid in assessing fees transparently to avoid surprises at closing.