An origination fee is a charge by a lender to process a new loan application. This fee is typically expressed as a percentage of the total loan amount and covers various administrative costs, including document preparation, underwriting, and other necessary procedures. Origination fees can vary depending on the type of loan and lender, typically ranging from 0.5% to 1% of the loan value. It is important for borrowers to be aware of these fees as they can impact the overall cost of taking out a loan.