See exactly what your lender charges to make the loan - origination fee, discount points, third-party closing costs - and the true APR once every fee is folded in.
These four examples use the default origination-fee rate for each loan product. Click the matching example button above the calculator to load any of them.
| Loan Product | Amount | Orig. Fee | Points | Lender Fees | Term | APR Impact |
|---|---|---|---|---|---|---|
| Conventional Mortgage | $400,000 | 1.0%% = $4,000 | 0 | $4,000 | 30 yr | +0.10%% |
| FHA Loan | $350,000 | 1.0%% = $3,500 | 0 | $3,500 + $6,125 MIP | 30 yr | +0.42%% |
| Auto Loan | $35,000 | 1.0%% = $350 | 0 | $350 | 5 yr | +0.55%% |
| Personal Loan | $15,000 | 2.0%% = $300 | 0 | $300 | 3 yr | +0.69%% |
On the $400,000 conventional mortgage at 1.0% origination and no points, the lender bills $4,000 at closing. Spread across a 30-year term, that fee adds roughly 0.10 percentage points to the APR. The same 1.0% on a 5-year auto loan adds far more per year - roughly 0.55 points - because the cost is amortized over only 60 months.
The lesson: the shorter the loan term, the more expensive the same fee becomes in APR terms. A 2% origination fee on a 3-year personal loan can push the real cost above 20% APR.
A $300,000 loan with a 1% origination fee ($3,000) measured in extra APR points:
| Loan Term | Fee Spread Over | Approx. APR Increase |
|---|---|---|
| 3 years | 36 months | +0.69%% |
| 5 years | 60 months | +0.42%% |
| 10 years | 120 months | +0.21%% |
| 15 years | 180 months | +0.14%% |
| 30 years | 360 months | +0.10%% |
An origination fee is what a lender charges to process and underwrite your loan. It is quoted as a percentage of the loan amount - typically 0.5% to 1% on a mortgage and 1% to 8% on a personal loan. On a $400,000 mortgage, a 1% origination fee is $4,000 deducted at closing.
These three are often lumped together but they are different things:
| Charge | What It Pays For | Who Sets It | Typical Amount |
|---|---|---|---|
| Origination fee | Underwriting, processing, loan setup | Your lender | 0.5%% - 1%% of loan (mortgage) |
| Discount points | Buys your interest rate down | Your lender | 1%% of loan per point |
| Third-party closing costs | Appraisal, title, credit report, recording | Outside vendors | 2%% - 5%% of loan |
The last line is the quick approximation used by this calculator. A precise APR is solved iteratively from the cash-flow schedule (the same method behind the Truth in Lending Act disclosure), which produces an answer within a few hundredths of a point of the estimate above.
| Loan Product | Typical Origination | Notes |
|---|---|---|
| Conventional mortgage | 0.5%% - 1.0%% | Negotiable; varies by lender |
| FHA loan | 1.0%% cap | Plus 1.75%% upfront MIP |
| VA loan | 1.0%% cap | Often waived for disabled veterans |
| USDA loan | 1.0%% | Plus 1%% upfront guarantee fee |
| Auto loan | $0 - $500 flat | Usually a flat doc fee |
| Personal loan | 1%% - 8%% | Heavily credit-score dependent |
1. Shop at least three lenders. The same borrower profile routinely gets quotes ranging from 0.5% to 1.5% origination - a $4,000 swing on a $400,000 loan.
2. Ask for a lender credit. A lender can offset the origination fee by raising your rate slightly. On a mortgage, one point of fee is roughly equal to 0.25% of rate; if you plan to move within 5 years, taking the higher rate and lower fee usually wins.
3. Compare APR, not rate. The loan with the lowest headline rate is frequently the most expensive once fees are counted. The APR column on the Loan Estimate is the number to compare.
4. Check for no-origination products. VA loans cap origination at 1% and many credit unions waive it entirely on auto and personal loans.
The advertised interest rate is only one of two levers a lender controls. The other is the origination fee. Because the fee is charged up front but its cost is spread across the life of the loan, it behaves like a silent rate increase - and it is the piece of the deal borrowers most often forget to compare.
Consider two $400,000 mortgage quotes. Lender A offers 6.50% with a 1% origination fee. Lender B offers 6.75% with zero origination. Over 30 years, Lender A costs $4,000 up front but saves about $0.25% per year in interest on a declining balance. The breakeven lands near 6 years: stay longer and the low-rate/high-fee loan wins; sell sooner and the no-fee loan wins.
That is why this calculator reports both the stated rate and the effective APR with fees. If you are planning to refinance or sell before the breakeven point, the higher-rate/no-fee option is usually the better financial decision even though it looks worse on a rate table.
Where the fee is capped by law, the cap becomes the market price. VA and FHA loans cap origination at 1%, so nearly every VA/FHA lender charges close to the cap. Conventional loans have no cap, which is why shopping matters most there.
| Loan Type | Legal Cap | Typical Charge | Can It Be Financed? |
|---|---|---|---|
| VA | 1.0% | 1.0% | Yes - rolled into the loan |
| FHA | 1.0% | 1.0% + 1.75% MIP | No - MIP is separate |
| USDA | 1.0% | 1.0% + 1% guarantee | Yes for the guarantee fee |
| Conventional | No cap | 0.5% - 1.0% | Yes - seller concessions |
| Personal loan | Varies by state | 1% - 8% | No - deducted from proceeds |
| Auto loan | Varies by state | Flat $0 - $500 | Usually rolled in |
⚠️ Important: This calculator provides estimates for planning purposes only. Actual origination fees, closing costs, and APRs vary by lender, loan program, credit profile, state, and loan-to-value ratio. The effective APR shown is a simplified estimate - your binding figure is the APR on the official Loan Estimate or Truth in Lending disclosure. This is not financial or legal advice.