Financing12 min read
Hard money loan costs: points, interest, and fees
Build the full cost stack, separate the loan commitment from cash to close, and see why the annualized cost differs from the note rate.
Updated Oct 28, 2026Read guide
Free hard money calculator
Hard Money Loan Calculator
Use this free hard money loan calculator to price a short-term loan the way hard money lenders do. The hard money calculator sizes the deal from LTC and ARV caps, adds points and origination fees, estimates interest-only payments and the balloon payoff, then shows cash to close and an all-in APR estimate.
- LTC and ARV LTV sizing
- Interest-only payment and balloon
- Points, origination, and all-in APR
Updated Oct 29, 2026 · Educational estimate, not a loan offer
Rental Property Math
Hard Money Loan Calculator
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Normalize two offers by total cost and profit.
Set the current offer as A, then change the rate, points, or fees and set it as B. Saved term sheets can also be assigned to either side.
AB
| Metric | A | B | B − A |
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How it works
How the hard money loan calculator works
A hard money quote is not one number. Hard money lenders approve a commitment, advance part of it at closing, hold back the rehab, and charge points, origination, and interest along the way. The calculator keeps those layers separate so the expensive parts are visible.
01
Size the commitment
Enter the purchase price, rehab budget, ARV, and the lender’s LTC and ARV LTV limits. The lower cap wins, and the purchase price caps the initial advance.
02
Price the money
Add the interest rate, points, origination and lender fees, third-party closing costs, draw fees, extensions, and the interest basis. Each item changes the all-in cost.
03
Test the exit
Compare the loan payoff and selling costs with total cash invested to get net profit, ROI, break-even sale price, and an all-in APR estimate.
Key terms
Hard money loan terms: LTC, LTV, ARV, points, origination, and all-in APR
Hard money lenders quote a short-term loan with a handful of terms. These are the ones that change the loan amount, the monthly payment, and the cash you bring to closing.
- LTC
- Loan-to-cost: the loan commitment divided by the purchase price plus rehab budget. Many hard money lenders cap LTC between 80% and 90%.
- LTV
- Loan-to-value: the loan amount divided by property value. This calculator uses ARV LTV, which divides the commitment by the after-repair value.
- ARV
- After-repair value: the expected market value once the rehab is complete. It drives the ARV LTV loan cap and much of the project’s profit.
- Points
- An upfront fee charged as a percentage of the loan commitment, not the cash received. Points are usually paid at closing.
- Origination
- The lender’s fee for making the loan. It may be quoted as points or a flat fee and is grouped with lender fees in this calculator.
- Interest-only payment
- A monthly payment that covers interest but pays down no principal. Interest-only payment = outstanding balance × annual rate ÷ 12.
- Balloon
- The remaining principal due at maturity or sale. On an interest-only hard money loan, the balloon is the full commitment unless principal is paid down.
- All-in APR
- An annualized estimate of points, origination, fees, and interest. The all-in APR shown here is a comparison number, not a Reg Z APR.
The formulas
The loan is a commitment. The cash is what you bring.
Start with the loan sizing waterfall. The commitment is the maximum the lender will fund. The initial advance is the cash available at closing. The holdback is released for rehab draws, so it is not cash in your pocket on day one. The formulas below show how the calculator prices the loan, the interest-only payment, and the balloon payoff.
Project cost
Project cost = purchase price + rehab budget
Loan commitment
Commitment = min(LTC × project cost, ARV LTV × ARV, project cost)
Initial advance and holdback
Initial advance = min(commitment, purchase price)
Holdback = commitment − initial advance
Interest-only payment and balloon
Monthly interest-only payment = outstanding balance × annual rate ÷ 12
Balloon payoff = remaining principal at maturity
Total finance charge
Finance charge = points + origination/lender fees + third-party costs + draw fees + extension fee + interest
Cash to close
Cash to close = purchase + purchase closing + points + fees + unfunded rehab − initial advance
Exit profit and ROI
Net profit = exit value − selling costs − loan payoff − total cash invested
ROI = net profit ÷ total cash invested × 100
All-in APR estimate (annualized cost)
All-in APR estimate = total finance charge ÷ loan commitment ÷ (hold months ÷ 12) × 100
The all-in APR estimate is a comparison number, not a Reg Z APR. It spreads every finance charge over the commitment and the hold, which is useful for comparing term sheets but does not account for the time value of money.
Default example
$150,000 purchase · $35,000 rehab · $260,000 ARV · 85% LTC · 70% ARV LTV · 11.00% for 6 months
- Project cost
- $185,000
- Loan commitment
- $157,250
- Initial advance
- $150,000
- Rehab holdback
- $7,250
- Unfunded rehab
- $27,750
- Points, origination, fees, and interest
- $16,194
- Cash to close
- $38,895
- Total cash invested
- $50,644
- Net profit at exit
- +$36,506
- ROI on cash invested
- 72.08%
- Break-even sale price
- $221,164
For a full walkthrough, read the hard money loan costs guide.
Monthly payment
Interest-only payments and the balloon payoff
The payment schedule works as a hard money loan payment calculator. It shows the interest-only payment each month as rehab draws increase the balance. At 11.00%, the first-month payment on the $150,000 initial advance is $1,375; at the full $157,250 commitment, it is $1,441.
Change the rate to use the page as a hard money loan interest rate calculator: a higher rate raises every monthly payment and the balloon payoff. Because the loan is interest-only, the balloon at maturity is the full commitment, before any extension fee or prepayment penalty.
Default example
11.00% interest-only note · 6-month hold · $157,250 commitment
- First-month payment
- $1,375
- Full-draw payment
- $1,441
- Balloon payoff
- $157,250
- All-in APR estimate
- 20.60%
The all-in APR estimate is the calculator’s annualized cost. It is not a Reg Z APR.
How lenders price the loan
How hard money lenders price a loan
The cheapest rate is not always the cheapest loan. A lower note rate helps, but points, origination, the loan size, the hold, and the interest basis can change the answer. Compare the total finance charge and the cash to close, not just the rate on the term sheet.
This hard money lender loan calculator keeps the property and exit assumptions separate from the loan terms, so you can compare two offers on the same deal. Change the rate, points, origination, LTC and ARV caps, interest basis, hold, extension, and fees to see which offer leaves the most profit and the lowest break-even sale price.
In the default example, the note rate is 11.00%, but the all-in APR estimate is 20.60%. Fixed fees and a 6-month hold explain most of the difference.
Higher LTC or ARV LTV
A larger commitment can reduce cash to close, but it also increases points, interest, and the balloon payoff you have to clear at the exit.
Higher points or origination
Points and origination are paid at closing. They raise cash to close and the all-in APR immediately, even though they do not change the note rate.
Longer hold
Every extra month adds interest and holding costs. A hold past maturity can also trigger an extension fee.
Dutch interest
Charging interest on the full commitment, including undrawn rehab funds, raises the cost when the holdback is large.
What is a hard money loan calculator?
An educational tool that sizes a short-term, business-purpose loan the way hard money lenders do, then prices points, origination, interest-only payments, the balloon payoff, and cash to close. It is a screening tool, not a loan offer.
How do hard money lenders calculate the loan amount?
Hard money lenders usually size the commitment from LTC and ARV LTV. The commitment is the lower of LTC × project cost, ARV LTV × ARV, and project cost. The initial advance is capped at the purchase price, and the balance becomes the rehab holdback.
How is the interest-only payment calculated?
Interest-only payment = outstanding balance × annual interest rate ÷ 12. In the default example, $150,000 advanced at 11% costs $1,375 in the first month; at full draw, $157,250 costs $1,441. Because no principal is paid, the balloon payoff at maturity is the full commitment.
Is interest charged on drawn funds or the full commitment?
Drawn-balance interest is charged only on money advanced. Commitment interest, or Dutch interest, is charged on the entire commitment, including undrawn rehab funds. Dutch interest costs more when a large holdback remains undrawn. Ask which basis the lender uses.
How are points and origination fees charged?
Points are a percentage of the loan commitment, not the cash advanced, and are usually paid at closing. Origination may be quoted as points or a flat fee; this calculator groups it with lender fees. Both increase cash to close and the all-in APR.
What is a balloon payment on a hard money loan?
An interest-only hard money loan does not amortize, so the balloon is the remaining principal due at maturity or sale. The calculator uses the full commitment as the payoff at exit. It does not model a refinance or a partial principal paydown.
Why is the all-in APR higher than the interest rate?
The all-in APR includes points, origination, lender and third-party fees, draw fees, extension fees, and interest, then annualizes them over the loan commitment and hold. Fixed costs spread over a six-month loan can push the all-in APR well above the note rate. It is an estimate, not a Reg Z APR.
Why is cash to close different from the loan amount?
The loan does not pay for everything. Cash to close includes the purchase price, purchase closing costs, points, origination and fees, and unfunded rehab, minus the initial advance. Holding costs and interest paid during the hold are added later in total cash invested.
What is a rehab holdback?
A holdback is the part of the commitment not advanced at closing. It is released as rehab is completed and inspected. This calculator splits it into the entered number of draws, spreads them across the draw period, and adds a per-draw fee. A lender may use a different schedule.
How do I compare two hard money lenders’ offers?
Use the same property and exit assumptions for both. Compare the commitment, cash to close, total finance charge, all-in APR, net profit, ROI, break-even sale price, and cost at a longer hold. A lower rate with higher points and origination can be the more expensive loan.
What does the hard money calculator exclude?
The model assumes an interest-only loan with a single balloon payoff at exit. It excludes amortization, a refinance takeout, prepayment penalties, late fees, state fee schedules, rent during the hold, income taxes, and a failed exit. Results are estimates based on your inputs.
Related questions
Hard money and mortgage FAQ
These answers cover common hard money and conventional mortgage questions. Conventional mortgage figures assume a 30-year fixed loan and are estimates, not loan offers. For the full loan cost walkthrough, read the hard money loan costs guide.
How are hard money loans calculated?
Start with the lower of LTC × project cost, ARV LTV × ARV, and project cost. Then add points, origination, interest-only payments, draw fees, extension fees, and the balloon payoff. The result is cash to close, total finance charge, and an all-in APR estimate.
What's the typical interest on a hard money loan?
Many hard money quotes fall in the 8%–15% range, with 10%–13% often quoted for standard fix-and-flip deals. The exact rate depends on leverage, credit, experience, property condition, and market. Points, origination, and fees are separate, so the all-in APR is higher than the note rate.
How much do I need to put down on a hard money loan?
Plan on roughly 10%–25% of the project cost, but the exact amount comes from the lender’s LTC and ARV caps. An 85% LTC loan means you fund 15% of purchase plus rehab, plus closing costs, points, and any unfunded rehab. A binding ARV cap can require more cash.
What is the 70% rule for hard money loans?
The 70% rule is a fix-and-flip screening guideline: pay no more than 70% of the after-repair value minus rehab costs. Maximum purchase price = (ARV × 70%) − rehab. It is not a lender requirement, but it helps leave room for holding, selling, and financing costs.
How much income do I need to qualify for a $400,000 loan?
There is no single income number. A $400,000 conventional loan at 7% over 30 years is about $2,661/mo in principal and interest; taxes, insurance, HOA, and other debts are extra. Assuming about $650/mo for taxes and insurance and no other debt, a 36% DTI needs roughly $9,200/mo ($110k/yr); a 43% DTI needs about $7,700/mo ($92k/yr). Hard money lenders usually focus on the property and ARV instead of salary.
Can I afford a 300k house on a $70k salary?
It can be possible, but it is tight. With 20% down and a 7% 30-year mortgage, principal and interest on a $240,000 loan is about $1,597/mo. Taxes and insurance can push the payment to roughly $2,100, or about 36% of a $70k gross salary. Other debts, a smaller down payment, or a higher rate can make it difficult.
What is the average monthly payment on a $400,000 loan?
There is no single average because rates, terms, and escrows vary. On a 30-year fixed loan, principal and interest is about $2,398 at 6%, $2,661 at 7%, and $2,935 at 8%. Taxes, insurance, and HOA are extra. A $400,000 interest-only hard money loan at 11% would be about $3,667/mo.
Can a 70 year old get a 20 year mortgage?
Age alone does not disqualify a borrower. Lenders generally focus on income, credit, assets, debts, and the property. A 20-year term at 70 is possible, but some lenders have overlays, and a shorter term or larger down payment can improve approval. Compare conventional, portfolio, and hard money options.
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