Loan Origination Fee Calculator

How it is calculated

The total fee is a percentage of the loan plus a flat charge: fee = loan × fee% ÷ 100 + fixed fee. The tool assumes the fee is taken out of the loan at closing, so net proceeds = loan − fee. The effective percentage shows the whole fee, flat part included, relative to the loan: effective % = fee ÷ loan × 100. One "point" equals 1% of the loan, so 1.5 points is entered as 1.5. Loan amount must be above zero, and the percentage and fixed fee cannot be negative. If the total fee would be larger than the loan itself, no result is shown, since the net proceeds would be negative. Type 0 in the fixed fee box when there is none, because a blank field gives no result. It does not include interest, which is a separate cost of the loan.

Common mistakes

• Entering the percentage as a decimal such as 0.015. The field takes a percentage, so 0.015 is read as 0.015% and the fee is almost nothing.
• Forgetting the fixed fee when comparing offers. A 1% fee with a $1,500 flat charge costs more than a 1.5% fee with no flat charge on a $200,000 loan, but the percentage alone hides this.
• Assuming you receive the full loan amount. When the fee is deducted at closing, you receive the net proceeds, so plan the purchase around that smaller number.
• Treating the origination fee as the cost of borrowing. It is only the upfront part; interest and other charges are not included.
• Leaving the fixed fee blank when there is none. The field must contain 0, or the tool gives no result.