Azure Application Gateway v2 cost: fixed fees plus capacity units

Quick answer

Application Gateway v2 has two cost parts: a fixed hourly gateway fee and a per-capacity-unit fee that scales with connections, throughput, and compute. The Standard_v2 SKU runs roughly $0.246 per hour fixed (about $180 per month) plus about $0.008 per capacity-unit-hour; the WAF_v2 SKU adds web application firewall inspection for roughly $0.443 per hour fixed (about $323 per month) plus about $0.0144 per WAF capacity-unit-hour. For simple layer-4 traffic without HTTP routing or WAF, a standard Load Balancer is far cheaper. The rule: use Application Gateway only when you need layer-7 routing or WAF, and right-size the capacity floor.

Application Gateway is Azure's layer-7 load balancer, handling HTTP and HTTPS routing, TLS termination, and optional web application firewall protection. Its v2 pricing model splits into a fixed component you pay just for the gateway existing and a variable component that scales with how much traffic it handles. Both parts, and the choice of SKU, drive the bill.

The two SKUs and their fees

SKU	Fixed fee	Capacity unit fee
Standard_v2	~$0.246/hr (~$180/mo)	~$0.008 per CU-hour
WAF_v2	~$0.443/hr (~$323/mo)	~$0.0144 per WAF CU-hour

A capacity unit represents a bundle of connections, throughput, and compute; the gateway consumes more units as traffic grows. The fixed fee is unavoidable while the gateway runs, and the capacity fee tracks load. WAF_v2 costs meaningfully more on both the fixed fee and the per-unit rate because it inspects traffic against firewall rules, the same protection-versus-cost tradeoff as the WAF cost guide.

Autoscaling and the capacity floor

v2 autoscales capacity units with traffic, so you are not stuck provisioning for peak. But you set a minimum instance count that acts as a floor, and capacity units are billed even at that floor when idle. Setting the minimum higher than needed means paying for capacity you rarely use, so match the floor to your baseline traffic and let autoscaling handle peaks. A gateway sitting mostly idle with a high minimum is a common, quiet overspend.

When a Load Balancer is cheaper

Application Gateway earns its fixed fee only when you need layer-7 features: path and host-based routing, TLS termination, cookie-based affinity, or WAF. For simple layer-4 traffic distribution, TCP or UDP, an Azure standard Load Balancer is far cheaper, with no comparable fixed layer-7 fee, as the app gateway versus load balancer guidedetails. Do not pay for a layer-7 gateway to do a layer-4 job.

Do you need WAF everywhere?

WAF_v2 nearly doubles the fixed fee and raises the capacity rate, so apply it where internet-facing applications genuinely need firewall inspection, not blanket across internal or low-risk endpoints. For an internal-only gateway with no exposure to the public internet, the Standard_v2 SKU without WAF may be appropriate and cheaper. Front Door is an alternative for global edge WAF and routing, covered in the Front Door premium guide.

Choosing the gateway on cost

Decide first whether you need layer-7 or WAF at all; if not, use a Load Balancer. If you do, pick the SKU by whether WAF is required, set the capacity floor to your baseline, and let autoscaling cover peaks. Price the gateway, including its fixed fee and expected capacity units, against the resource catalog before you deploy so the fixed layer-7 cost is a deliberate choice rather than a default reached for out of habit.

FAQ

How is Application Gateway v2 priced?

In two parts: a fixed hourly gateway fee and a per-capacity-unit fee that scales with connections, throughput, and compute. Standard_v2 runs roughly $0.246 per hour fixed (about $180 per month) plus about $0.008 per capacity-unit-hour. The WAF_v2 SKU costs more, roughly $0.443 per hour fixed plus about $0.0144 per WAF capacity-unit-hour, because it inspects traffic against firewall rules.

How much more does WAF_v2 cost than Standard_v2?

The WAF_v2 fixed fee is roughly $0.443 per hour (about $323 per month) versus about $0.246 per hour (about $180 per month) for Standard_v2, nearly double, and the per-capacity-unit rate is also higher. The premium buys web application firewall inspection, so apply WAF_v2 where internet-facing apps genuinely need firewall protection rather than blanket across all endpoints.

When is an Azure Load Balancer cheaper than Application Gateway?

For simple layer-4 traffic distribution over TCP or UDP that does not need HTTP path or host routing, TLS termination, or WAF. A standard Load Balancer has no comparable fixed layer-7 fee, so it is far cheaper for layer-4 work. Application Gateway earns its fixed fee only when you actually use its layer-7 features.

What is the capacity floor in Application Gateway v2?

It is the minimum instance count you configure, which sets a floor of capacity units that are billed even when the gateway is idle. v2 autoscales above the floor with traffic, but setting the minimum higher than your baseline means paying for capacity you rarely use. Match the floor to baseline traffic and let autoscaling handle peaks to avoid quiet overspend.

How does C3X help with Application Gateway cost?

C3X prices Application Gateway configurations from Terraform before you deploy, including the SKU choice and expected capacity, so the fixed fee and the WAF premium are visible in the pull request. That lets you decide whether you need layer-7 or WAF at all, and right-size the capacity floor, before the gateway is running and billing.

What to do next

Price Application Gateway before you deploy. C3X reads your Terraform and prices your resources against a live catalog. Start with the quickstart.