{{Short description|Fee associated with the taking of a loan}} An '''origination fee''' or '''establishment fee''' is a payment charged for establishing a loan account with a bank, broker, or other financial service provider.<ref>{{cite web|title=Origination Fee|url=https://www.investopedia.com/terms/o/origination-fee.asp|publisher=investopedia|accessdate=21 May 2013}}</ref><ref name=invwords>{{cite web|title=loan origination fee|url=http://www.investorwords.com/7384/loan_origination_fee.html|publisher=investorwords|accessdate=21 May 2013}}</ref><ref>{{cite web |url=https://www.plenti.com.au/guides/what-is-an-establishment-fee/ |title=What is an establishment fee? |access-date=January 17, 2024 |publisher=Plenti }}</ref>
While origination fees can be a set amount, a tiered amount, or a percentage. Percentages typically range from 1.0% to 5.0% of the loan amount, varying based on whether the loan is in the prime or subprime market. For example, an origination fee of 5% on a $10,000 loan is $500.<ref name=invwords></ref><ref>{{cite web| url=https://www.loans123.com.au/car-finance/ |title=Included fees guide }} Tuesday, 18 June 2019 </ref> In the United States, Discount points are used to buy down the interest rates, temporarily or permanently. Origination fees and discount points are both items listed under lender-charges on the HUD-1 Settlement Statement. Regulation Z was enacted to protect borrowers from abusive lending practices. Under this regulation, origination fees for mortgages cannot be deducted from taxes.<ref>{{cite web|title=Loan Origination Fees: What They Are And How You Can Save|url=http://www.personaldebtrelief.net/loan-origination-fees/|publisher=personaldebtrelief|accessdate=1 January 2014|archive-url=https://web.archive.org/web/20131029211549/http://www.personaldebtrelief.net/loan-origination-fees/|archive-date=29 October 2013|url-status=dead}}</ref>
== See also == * Bank fee * Overdraft fee
==Notes== {{Reflist}}
Category:Banking
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