Hard Money Loan Calculator
Hard money loans are the go-to financing for foreclosure investors, but the true cost is hidden behind points, origination fees, draw schedules, and extension penalties. This calculator reveals your total cost of capital so you can make better offers and compare lenders on the number that matters: effective APR.
What this tool calculates
Interest-only payments, all fees, draw schedule impact, and a true effective APR for lender comparison.
Monthly payment
Interest-only
Total cost
All-in financing
Effective APR
True annual rate
Draw schedule
Interest savings
Jump to
Calculate your hard money loan cost
Enter your loan details. Results update instantly. Use "Compare two lenders" to see offers side-by-side.
Loan Details
Total amount borrowed from the lender.
Annual rate. Hard money is typically 10-15%.
Usually 6-18 months for hard money.
Fees & Points
Typically 1-3% of loan amount.
Typically 1-4 points. Each point = 1% of loan.
Appraisal, doc prep, processing, etc.
Results
Total cost of your hard money loan including all fees and interest.
Monthly Payment
$0.00
Interest-only payment on full loan balance.
Total Interest
$0
Over the full loan term.
Upfront Fees
$0
Origination + points + other.
Total Cost of Capital
$0
All interest + fees + extensions + prepayment penalty.
Effective APR
0.0%
Annualized all-in rate including fees. Compare lenders on this number, not the stated rate.
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Understanding hard money loan costs
Hard money loans are short-term, asset-based loans secured by the property itself. They fund faster than banks but cost more. Knowing exactly how much more is the difference between a profitable flip and an expensive lesson.
Key terms
Interest-only
You pay only the interest each month. The principal is due as a balloon at maturity.
Points
Each point = 1% of the loan amount, paid upfront at closing. Negotiable with experience.
Origination fee
A separate percentage fee covering the lender's administrative costs.
Effective APR
The annualized all-in cost expressed as a rate. The only apples-to-apples lender comparison.
Draw schedules save money
If your lender disburses rehab funds in 4 draws instead of a lump sum, you pay interest on a smaller balance for most of the project. On a $200,000 loan at 12% over 12 months, 4 draws can save $6,000+ in interest versus a lump sum. Use the draw schedule toggle in the calculator above to see the exact difference.
How hard money loans work
Short-term, asset-based financing for distressed properties.
Hard money lenders care more about the property's value than your credit score. They typically lend 65-80% of the after-repair value (ARV) or 80-90% of the purchase price, whichever is lower. Loan terms run 6-18 months with interest-only payments and a balloon payment at maturity. Funding happens in 7-14 days, compared to 30-60 days for conventional loans.
Understanding points and origination fees
Upfront costs that significantly affect your total cost of capital.
A lender offering 12% with 2 points and 2% origination on a $250,000 loan charges $10,000 in upfront fees alone. Add 12 months of interest ($30,000) and you are at $40,000 total financing cost, a 16% effective APR. Another lender at 14% with 1 point and 1% origination charges $5,000 upfront plus $35,000 interest for $40,000 total. Same total cost, but the second lender requires less cash at closing.
Hard money vs conventional for flips
When to use each financing vehicle.
Use hard money when
- - Speed matters (auction deadlines)
- - Property is not financeable as-is
- - Term is under 18 months
- - You need rehab draws built in
Use conventional when
- - Holding long term (rental)
- - Property is in livable condition
- - You can wait 30-60 days to close
- - Lower rates matter more than speed
How to compare hard money lenders
Four numbers that cut through marketing.
1
Effective APR
The only apples-to-apples comparison. Use the calculator above.
2
Cash at closing
Upfront fees affect how much capital you need. Lower upfront can be worth a higher rate.
3
Draw flexibility
More draws = lower interest cost. Ask how many and what inspection triggers each draw.
4
Extension terms
Projects run long. Know the extension fee and whether the rate changes before you sign.
Hard money loan FAQs
Common questions about hard money costs, payments, and when to use this financing.
How do hard money loan payments work?
Hard money loans are typically interest-only, meaning your monthly payment covers only the interest on the outstanding balance. The full principal is due at the end of the loan term as a balloon payment. This keeps monthly payments low during a rehab project but requires a clear exit strategy (sale or refinance) before the term ends.
What is the typical interest rate on a hard money loan?
Hard money interest rates typically range from 10% to 15% annually, depending on the lender, the borrower's experience, the loan-to-value ratio, and the property type. Rates are higher than conventional loans because hard money lenders take on more risk and fund deals faster, often in 7-14 days versus 30-60 days for banks.
How do points work on a hard money loan?
Each point equals 1% of the loan amount, paid upfront at closing. For example, 2 points on a $200,000 loan costs $4,000. Points are a one-time fee separate from the interest rate. Some lenders offer lower rates with more points, or higher rates with fewer points. Use the effective APR in this calculator to compare which combination actually costs less.
What is the effective APR and why does it matter?
The effective APR (annual percentage rate) rolls all costs into a single annualized rate: interest, origination fees, points, extension fees, and prepayment penalties. Two loans with the same stated rate can have very different effective APRs because of fee differences. Always compare lenders on effective APR rather than the advertised interest rate.
What is a draw schedule for hard money loans?
A draw schedule determines how the lender disburses rehab funds. Instead of giving you the full loan upfront, the lender releases money in stages (draws) as you complete portions of the rehab. This reduces the lender's risk and your interest cost because you only pay interest on the amount drawn so far.
When should I use hard money vs conventional financing?
Use hard money when you need speed (closing in under two weeks), the property does not qualify for conventional financing (distressed condition), or you need flexible terms for a short-term project (6-18 months). Use conventional financing for long-term holds where lower rates and longer terms reduce your carrying costs.