Loan Origination Fee

Full Explanation

A loan origination fee is an upfront charge by a lender to cover the administrative cost of processing, underwriting, and funding a new loan. In Canada, origination fees are more common with alternative or private lenders than with major banks. They are typically expressed as a percentage of the loan amount (0.5%–2% for mortgages, up to 8% for some personal loans). Origination fees must be included in the APR disclosure under Canadian federal regulations. Always factor origination fees into the true cost of borrowing when comparing loan offers.