1.5%.
Allowable Deductions. According to IRS Publication 530, you can deduct the full cost of any loan origination fees or points you pay to obtain a new home loan, as long as the fees meet certain criteria. However, if your mortgage was a refinance loan, you must typically spread the deductions over the life of the loan. For example, if your origination fees equal $4,500 for a 30-year loan, you can deduct $150 each year for the next 30 years. If your loan is for 30 years then you can deduct 1/30th of the points each year on your taxes. Typically you must deduct the points on a refinance mortgage over the life of the loan unless part of the refinance proceeds are used to improve the main home. The loan origination fee is calculated as a percentage, or point, of the total loan amount. For example, let’s assume you are getting a $100,000 mortgage for the purchase of a house. The loan origination fee is 1.5%. In order to calculate the amount of the origination fee, you multiply $100,000 x 1.5%, for a total of $1,500. If a borrower were to obtain a $200,000 loan for the purchase of a second home, with a loan origination of 1 point, you would take $200,000 x 1%, for a fee of $2,000. Fees related to the acquisition of a loan are not deductible and are not basis adjustments. A credit report fee is a good example. For more information, refer to Publication 936, Home Mortgage Interest Deduction; Tax Topic 504, Home Mortgage Points; and Publication 551, Basis of Assets. On average, home buyers pay 1% of the loan amount in the form of an origination fee. For example, on a loan of $300,000, a 1% origination fee would come out to $3,000. So the more money you borrow, the higher the fee. If your lender is charging you a mortgage origination fee much higher than 1%, you should ask them why. Points. If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home... Publication 17 - Your Federal Income Tax (For Individuals) - Student Loan Interest Deduction. Loan origination fee. In general, this is a one-time fee charged by the lender when a loan is made.
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irs publication origination fees