Origination fee

A service fee charged by a lender and broker that the borrower pays on the closing date

All lenders and mortgage brokers charge an origination fee,which can be as much as 2.5% of the loan amount. Online mortgage brokers generally charge much less.

Sometimes lenders will refer to this fee in terms of origination points, where 1 point equals 1% of the loan amount. Unlike discount points, you can’t deduct the origination fee from your income taxes since it’s just a service charge, not interest.

See: Closing costs