Hard Money Loan Calculator
Calculate hard money loan costs, points, interest, and effective APR for real estate investing.
Loan Details
Loan Terms
Fees & Points
Monthly Payment
$1,500
Cost Analysis
Total Repayment
- • LTV typically capped at 65-75% of ARV for fix-and-flip
- • Factor loan costs into your flip budget before making offers
- • Have an exit strategy (sell or refinance) before the term ends
- • Negotiate points and fees - they're often flexible
- • Some lenders offer no prepayment penalty - ask!
About This Calculator
The Hard Money Loan Calculator helps real estate investors calculate the true cost of asset-based, short-term financing for fix-and-flip projects, bridge loans, and non-conventional deals. With average hard money rates settling at 10.43% as of late 2025 according to Lightning Docs Q2 2025 data, understanding your total borrowing cost—including points, fees, and effective APR—is essential for profitable investing. Hard money loan originations are forecast to rise 12% in 2025-2026 as traditional banks tighten investment property underwriting. This calculator computes monthly interest payments, total loan costs, effective APR with all fees, and break-even analysis to ensure your deal profits exceed your financing costs. Whether you're a first-time flipper or experienced investor, knowing your true cost of capital separates profitable deals from expensive mistakes.
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How to Use the Hard Money Loan Calculator
- 1Enter your loan amount—typically 65-80% of purchase price or up to 90% of ARV (After-Repair Value) for experienced borrowers.
- 2Input the annual interest rate (current market range: 9-14%, with 10-11% common for qualified borrowers in competitive markets).
- 3Enter origination points charged by the lender (1 point = 1% of loan amount; typical range 1.5-3 points).
- 4Add other closing fees: appraisal ($400-800), processing ($500-1,500), document prep ($200-500), wire fees ($50-100).
- 5Set your loan term in months (standard terms: 6, 9, 12, or 18 months; some lenders offer 24 months).
- 6Select payment structure: interest-only (most common) or fully amortizing (rare for hard money).
- 7Review total cost breakdown: monthly payment, total interest, total fees, and effective APR including all costs.
2025-2026 Hard Money Loan Rate Environment
Hard money rates have stabilized into what lenders call "the new normal" (SDC Capital):
Current Rate Ranges (Late 2025):
| Borrower Profile | Rate Range | Points | Notes |
|---|---|---|---|
| Experienced (5+ flips) | 9.0-10.5% | 1.5-2 | Best terms available |
| Intermediate (2-4 flips) | 10.0-11.5% | 2-2.5 | Standard market rates |
| New Investor (0-1 flips) | 11.0-13.0% | 2.5-3.5 | Higher risk premium |
| Credit Challenges (<650) | 12.0-14.0% | 3-4 | Deal strength critical |
Rate Trends:
- September 2024: 11.1% average
- September 2025: 10.43% average
- 2026 Forecast: Stable 9.5-11% for qualified borrowers
Regional Rate Variations:
| Market | Avg. Rate | Avg. Loan Amount |
|---|---|---|
| California | 10.43% | $1,041,880 |
| Texas | 11.2% | $485,000 |
| Florida | 11.5% | $520,000 |
| National Average | 10.8% | $425,000 |
California's lower rates reflect intense lender competition in high-value markets.
Complete Hard Money Cost Breakdown
Hard money loans have multiple cost components beyond the interest rate:
1. Interest (Ongoing Monthly Cost):
| Loan Amount | Rate | Monthly Interest |
|---|---|---|
| $150,000 | 10% | $1,250 |
| $250,000 | 10% | $2,083 |
| $400,000 | 10% | $3,333 |
| $600,000 | 10% | $5,000 |
2. Origination Points (Upfront at Closing):
| Loan Amount | 2 Points | 3 Points | 4 Points |
|---|---|---|---|
| $150,000 | $3,000 | $4,500 | $6,000 |
| $250,000 | $5,000 | $7,500 | $10,000 |
| $400,000 | $8,000 | $12,000 | $16,000 |
| $600,000 | $12,000 | $18,000 | $24,000 |
3. Third-Party Fees (Typical Ranges):
| Fee Type | Low | Average | High |
|---|---|---|---|
| Appraisal | $400 | $600 | $1,000 |
| Processing/Admin | $500 | $1,000 | $1,500 |
| Document Prep | $200 | $350 | $500 |
| Title Insurance | $800 | $1,500 | $3,000 |
| Escrow/Closing | $500 | $1,000 | $2,000 |
| Wire Fees | $50 | $75 | $100 |
Total Cost Example ($300,000 loan, 11%, 2.5 points, 6 months):
| Cost Component | Amount |
|---|---|
| Interest (6 months) | $16,500 |
| Points (2.5) | $7,500 |
| Third-Party Fees | $3,500 |
| Total Borrowing Cost | $27,500 |
| Effective APR | 18.3% |
Interest-Only vs. Amortizing Payments
Most hard money loans use interest-only payments with a balloon—here's why:
Interest-Only Structure (95% of Hard Money):
| Month | Payment | Principal | Remaining Balance |
|---|---|---|---|
| 1-11 | $2,500 | $0 | $300,000 |
| 12 | $2,500 + $300,000 balloon | $300,000 | $0 |
Advantages of Interest-Only:
- Lower monthly payments (preserve cash for renovations)
- Simple calculation and budgeting
- You're selling anyway—why pay down principal?
- Standard industry practice
Fully Amortizing Structure (Rare):
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $4,853 | $2,353 | $2,500 | $297,647 |
| 6 | $4,853 | $2,412 | $2,441 | $282,985 |
| 12 | $4,853 | $2,472 | $2,381 | $265,000 |
When Amortizing Makes Sense:
- BRRRR strategy with longer hold period
- Bridge loan to conventional refinance
- Properties you might keep if market softens
Monthly Payment Comparison ($300,000 at 10%, 12 months):
| Type | Monthly | Total Paid | Principal Reduction |
|---|---|---|---|
| Interest-Only | $2,500 | $30,000 + balloon | $0 |
| Amortizing | $4,853 | $58,236 | $35,000 |
LTV, LTC, and ARV: Understanding Loan Limits
Hard money lenders use multiple metrics to determine maximum loan amounts:
Key Terms:
- LTV (Loan-to-Value): Loan ÷ Current Property Value
- LTC (Loan-to-Cost): Loan ÷ Total Project Cost (Purchase + Rehab)
- ARV (After-Repair Value): What property will sell for post-renovation
- LTARV (Loan-to-ARV): Loan ÷ After-Repair Value
Typical Lender Limits:
| Metric | Conservative | Standard | Aggressive |
|---|---|---|---|
| LTV (Purchase) | 65% | 70-75% | 80% |
| LTC | 75% | 80-85% | 90% |
| LTARV | 65% | 70% | 75% |
Real Example - Calculating Maximum Loan:
| Property Details | Value |
|---|---|
| Purchase Price | $200,000 |
| Repair Budget | $50,000 |
| Total Project Cost | $250,000 |
| ARV (After Repairs) | $320,000 |
| Lending Metric | Calculation | Max Loan |
|---|---|---|
| 75% LTV | $200,000 × 0.75 | $150,000 |
| 85% LTC | $250,000 × 0.85 | $212,500 |
| 70% LTARV | $320,000 × 0.70 | $224,000 |
| Actual Loan | Lower of above | $150,000 |
Most lenders use the LOWER of multiple calculations to manage risk.
100% Financing—Is It Possible? Some lenders advertise "100% of purchase" or "100% of rehab" but not both simultaneously. True 100% financing requires:
- Very experienced borrower (10+ successful flips)
- Extremely strong deal (60% LTARV or better)
- Additional collateral (cross-collateralization)
- Higher rates and points
Hard Money vs. Other Financing Options
Hard money isn't always the right choice—compare your options:
Financing Comparison for Investment Properties:
| Factor | Hard Money | DSCR Loan | Conventional | Private Lender |
|---|---|---|---|---|
| Rate | 9-14% | 7-9% | 6-8% | 8-12% |
| Points | 1.5-4 | 1-2 | 0-1 | 1-3 |
| Term | 6-18 mo | 30 years | 30 years | Negotiable |
| Min Credit | 600 | 660 | 680 | Varies |
| Speed | 7-14 days | 30-45 days | 45-60 days | 3-14 days |
| Property Condition | Any | Rent-ready | Good | Any |
| Experience Required | None | Some | None | Often |
When Hard Money Wins:
- Speed critical (competitive bidding)
- Property not financeable conventionally (distressed)
- Quick flip planned (under 6 months)
- Credit issues but strong deal
- Bridge to conventional financing
When to Choose Alternatives:
| Situation | Better Option | Why |
|---|---|---|
| Long-term rental | DSCR Loan | Lower rate, 30-year term |
| Primary residence | Conventional | Best rates, no points |
| Slow flip (9+ months) | Private Lender | Negotiable terms |
| Rehab complete | Cash-out Refi | Exit hard money faster |
Total Cost Comparison (6-Month $250K Loan):
| Loan Type | Monthly | Total Cost |
|---|---|---|
| Hard Money (11%, 2.5 pts) | $2,292 | $20,000 |
| Private Lender (9%, 2 pts) | $1,875 | $16,250 |
| DSCR (8%, 1 pt) | $1,667* | N/A (30-year) |
*DSCR not suitable for flip—30-year term
Red Flags: Predatory Hard Money Lenders to Avoid
The hard money industry includes legitimate operators and predatory lenders. Know the warning signs:
Legitimate Lender Characteristics:
- Clear, written fee disclosure before application
- Rates within market range (9-14%)
- Points within market range (1.5-4)
- No upfront fees before approval (appraisal exception)
- References from other investors
- Physical office or verified business address
- Licensed in your state (where required)
Red Flags—Walk Away If You See:
| Warning Sign | Why It's Dangerous |
|---|---|
| Upfront fees before approval | "Advance fee" scam—never get money |
| Rates above 18% | Loan shark territory |
| Points above 5% | Predatory pricing |
| Guaranteed approval promises | Legitimate lenders assess risk |
| Pressure to close immediately | Prevents due diligence |
| No written disclosures | Hidden fees will appear |
| Wire to personal account | Fraud indicator |
| No physical address/references | Fly-by-night operation |
Hidden Fee Tactics to Watch:
- "Processing fees" that duplicate points
- "Extension fees" not disclosed upfront
- "Exit fees" for early payoff
- "Inspection fees" charged monthly
- "Draw fees" for rehab disbursements
- "Late fees" with short grace periods
Due Diligence Checklist:
- Verify state licensing (where required)
- Check BBB and Google reviews
- Ask for borrower references
- Get written fee disclosure before paying anything
- Have attorney review loan documents
- Compare to 2+ other lenders
Calculating Your Break-Even Point
Before taking hard money, ensure your deal profits exceed total borrowing costs:
Break-Even Formula: Minimum Profit = Hard Money Costs + Holding Costs + Selling Costs + Target Profit
Example Deal Analysis:
| Deal Parameters | Value |
|---|---|
| Purchase Price | $180,000 |
| Rehab Budget | $45,000 |
| ARV | $300,000 |
| Hard Money Loan | $200,000 |
| Rate/Points | 11% / 2.5 points |
| Timeline | 5 months |
Hard Money Costs:
| Cost | Calculation | Amount |
|---|---|---|
| Interest | $200K × 11% × 5/12 | $9,167 |
| Points | $200K × 2.5% | $5,000 |
| Fees | Appraisal + closing | $2,500 |
| Total Financing | $16,667 |
Other Costs:
| Cost | Amount |
|---|---|
| Rehab | $45,000 |
| Holding (5 mo) | $4,000 |
| Selling (8% ARV) | $24,000 |
| Total Other | $73,000 |
Profit Analysis:
| Line Item | Amount |
|---|---|
| Sale Price (ARV) | $300,000 |
| Less: Purchase | -$180,000 |
| Less: Financing | -$16,667 |
| Less: Other Costs | -$73,000 |
| Net Profit | $30,333 |
| Cash-on-Cash ROI | 67.4% |
Your cash invested: $45,000 (down payment + rehab beyond loan) Return on that cash: $30,333 ÷ $45,000 = 67.4%
Minimum ARV Needed: To achieve 20% net margin, this deal needs minimum ARV of $285,000. Below that, hard money costs compress profit unacceptably.
Pro Tips
- 💡Get pre-approved before making offers—knowing your borrowing capacity and terms lets you bid confidently and close quickly.
- 💡Compare total cost, not just rate—a 10% loan with 3 points costs more than 11% with 1.5 points on a 6-month flip.
- 💡Build lender relationships early—repeat borrowers consistently receive better rates, faster closings, and higher LTV limits.
- 💡Factor ALL hard money costs into your 70% Rule calculation before making offers—financing costs come directly from your profit margin.
- 💡Request draw schedules for rehab funds in writing before closing—unexpected draw limitations can stall your renovation.
- 💡Negotiate points on larger loans—lenders often reduce points from 3% to 2% on loans above $300,000 if you ask.
- 💡Keep 6+ months of interest payments in reserve—lenders verify reserves, and you will need them if your project extends.
- 💡Get extension terms in writing upfront—knowing the cost and availability of extensions prevents panic if your project runs long.
- 💡Use hard money lenders who fund rehab in draws—this reduces your interest costs versus borrowing the full amount day one.
- 💡Plan your exit before you close—refinance timeline, sale timeline, or partner buyout should be clear before taking hard money.
- 💡Maintain excellent communication with your lender throughout the project - proactive updates build trust and flexibility.
- 💡Have backup hard money lenders ready - if your primary falls through, you need to close fast to avoid losing deals.
- 💡Document all rehab work with photos and receipts - lenders require this for draws and it protects you in disputes.
- 💡Consider interest-only payments during rehab to maximize cash flow and minimize carrying costs during renovation.
Frequently Asked Questions
Most hard money lenders require 600+ credit scores, though some work with lower scores if the deal is strong. Credit score affects rate—borrowers above 680 may receive 1-2% lower rates. However, deal quality matters more than credit: a 580 credit borrower with a 60% LTARV deal may get funded while a 750 credit borrower with an 80% LTARV deal gets declined. Hard money is asset-based lending—the property secures the loan.
