Hard money loan calculator: the payment and the real cost
Size the loan from price, rehab and ARV, or type the amount you were offered. You get the interest-only payment, points, fees, total cost and a yearly figure for comparing offers, with draws counted.
Fits the box within program limits
Interest-only payment, full balance
$2,530
A $276,000 loan at 11.00% is $2,530 a month in interest on the full balance. Over 9 months, with 2 points and $1,500 in fees, it costs $29,790 if interest runs on the whole loan from day one, or $28,415 if it runs only on rehab money once drawn.
- Loan amount
- $276,000
- Purchase advance
- $216,000
- Rehab holdback
- $60,000
- Points
- $5,520
- Cash to close
- $31,020
- Loan as % of ARV
- 69.0%
| Full balance from day one | Drawn money only | |
|---|---|---|
| First month's interest | $2,530 | $1,980 |
| Interest over the term | $22,770 | $21,395 |
| Points and fees | $7,020 | $7,020 |
| Total cost of borrowing | $29,790 | $28,415 |
| Annualized cost | 14.4% | 14.6% |
Annualized cost is the total cost divided by the average balance outstanding, scaled to 12 months. It is a simple yearly figure for comparing offers, not an APR.
The method
- Loan = purchase price × purchase advance % + rehab × rehab funded %, cut to the ARV cap if it is lower. A loan amount you type replaces this.
- Rehab holdback = the funded rehab money, which the lender keeps and pays out in draws. The rest of the loan is the purchase advance.
- Interest, full balance = loan × rate / 12 × months.
- Interest, drawn only = purchase advance × rate / 12 × months, plus each equal monthly draw from the end of its month to payoff. With 4 draws on a 9-month loan, the average draw is out 6.5 months.
- Total cost = interest + points + fees. Annualized cost = total cost / average balance × 12 / months.
The stamp checks the loan against the program: "Fits the box" when it sits inside every limit, "ARV-capped" when 75% of after-repair value sets the loan and you bring more cash, and "Out of range" under $50,000 or over $3,000,000.
Hard money and private money are the same math
Whether the lender is a fund or a person, the cost is interest, points and fees over the time you hold the money. Compare offers on total dollars for your actual timeline, not on the rate alone: a lower rate with 3 points can cost more than a higher rate with 1 on a 6-month flip. For profit on the whole flip, use the fix and flip calculator. For terms, see fix and flip loans or bridge loans on a finished house, and send us the deal for a quote.
Questions people ask
How is a hard money loan payment calculated?
Almost all hard money loans are interest only, so the payment is the balance times the rate divided by 12. A $276,000 loan at 11% is $276,000 × 0.11 / 12 = $2,530 a month. Nothing comes off the principal; you repay it all when you sell or refinance.
What does a hard money loan really cost?
Interest plus points plus fees. In the example: 9 months of interest at $2,530 is $22,770, 2 points is $5,520 and lender fees are $1,500, for $29,790. Spread over the $276,000 balance and scaled to a year, that is ($29,790 / $276,000) × 12 / 9 = 14.4%. Short loans look more expensive on that basis because the points are paid over fewer months.
Do I pay interest on rehab money before it is drawn?
It depends on the lender, and it is worth asking. Some charge interest on the whole loan from closing, including the rehab holdback still sitting with them. Others charge only on money you have drawn. With $60,000 of rehab drawn over 4 months on a 9-month loan, the difference in the example is $1,375.
How much can I borrow on a fix and flip?
On the program here: up to 90% of the purchase price plus 100% of the rehab budget, with the whole loan capped at 75% of after-repair value, from $50,000 to $3,000,000. In the example, $216,000 + $60,000 = $276,000, which is 69% of the $400,000 ARV, so the cap does not bite.
Numbers look right?
Send the deal. We check it against the lender's terms and come back with a loan.