About the Hard Money Loan Calculator
Hard money lenders fund fix-and-flip and bridge deals quickly, but they price the loan very differently from a bank mortgage. This hard money loan calculator sizes the loan the way most private lenders do — a percentage of the purchase price plus a share of the rehab budget, capped at a maximum percentage of the after-repair value (ARV) — and then adds up the origination points, lender fees and interest-only payments for your hold period.
It is designed for flippers, BRRRR investors and anyone comparing term sheets from several lenders. Enter the purchase price, renovation budget and ARV, then the lender’s loan-to-cost and ARV limits, rate, points and fees. You will see the loan amount, the monthly interest payment, the total cost of borrowing, the cash you must bring and an annualized effective rate that makes quotes easy to compare.
The calculator assumes interest-only payments on the full loan amount for every month of the term and a balloon repayment of the principal at the end. Lenders that fund rehab in draws and only charge interest on money drawn will cost somewhat less than shown.
With the default inputs, the total cost of borrowing is $26,800.00. Change any value above to recalculate instantly.
How to use the hard money loan calculator
- 1Enter the purchase price, rehab budget and after-repair value.
- 2Enter the lender’s loan-to-cost, rehab funding share and maximum loan-to-ARV.
- 3Add the interest rate, points and any lender fees from the term sheet.
- 4Set how many months you expect to hold the loan.
- 5Compare the total cost, cash needed and effective annual cost across lenders.
Formula and method
Most hard money lenders size a loan two ways and lend the lower figure: a loan-to-cost amount (a percentage of the purchase price plus a percentage of the rehab budget) and a loan-to-ARV cap (a percentage of the after-repair value). Whatever the lender will not fund, you pay in cash.
Hard money loans are usually interest-only, so each monthly payment is the loan × annual rate ÷ 12, and the principal is repaid in one balloon when you sell or refinance. Points are a percentage of the loan paid at closing. The effective annual cost spreads interest, points and fees over the loan amount and term, which is why short holds with high points can cost far more than the headline rate suggests.
- LTC
- Share of the purchase price funded (purchase part of loan-to-cost)
- R%
- Share of the rehab budget funded
- ARV
- After-repair value of the property
- maxLTV
- Lender’s maximum loan-to-ARV ratio
Worked examples
$200k flip with $50k rehab, 12% and 2 points for 9 months
The lender funds 90% of the $200,000 price plus the full $50,000 rehab = $230,000, under the 70% ARV cap of $245,000. Interest-only payments are $2,300 a month, so nine months cost $20,700; with $4,600 in points and $1,500 in fees the loan costs $26,800, about 15.5% a year.
Loan limited by the ARV cap
Loan-to-cost would allow $335,000, but 65% of the $450,000 ARV caps the loan at $292,500. You bring $98,275 to close and fund the rehab, and a year of 11% interest plus 3 points and fees costs $42,950.
Frequently asked questions
How are hard money loan points calculated?+
Points are a percentage of the loan amount charged at closing. Two points on a $230,000 loan is $4,600. Whether you pay them in cash at closing or the lender deducts them from the loan proceeds, they are a real cost of the loan and belong in your cash-to-close budget.
What interest rates do hard money lenders charge?+
Rates are typically well above conventional mortgages, often around 10%–15% a year with 1–4 points, depending on your experience, the deal’s leverage and the market. Always compare the full cost, not just the rate.
How much will a hard money lender lend?+
Many lend up to about 85%–90% of the purchase price and 100% of the rehab, but cap the total at roughly 65%–75% of the after-repair value. The lower of the two limits sets your loan.
Are hard money loans interest-only?+
Usually yes. You pay only interest each month and repay the full principal in a balloon when you sell or refinance. Some lenders charge interest only on rehab funds once they are drawn.
What is the 70% rule for flips?+
The 70% rule says a flipper should pay no more than 70% of ARV minus repair costs. It leaves room for financing costs like hard money interest and points, selling costs and profit.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.