Hard Money Loan Calculator

Hard money is the fastest capital in real estate and the most expensive. For a fix-and-flip investor, the appeal is speed and flexibility: a private lender can fund a deal in days, base the loan on the property rather than your tax returns, and release rehab money in draws. The cost of that speed is steep, and it is front-loaded in ways that a simple interest rate never shows. This analyzer pulls every cost into one figure so you know what the money actually costs before you sign.

What a hard money loan really is

A hard money loan is short-term financing secured by real estate and issued by a private lender or fund rather than a bank. The loan is priced on the asset — usually the after-repair value or the total project cost — not your credit score. Terms run short, commonly six to eighteen months, and the structure is almost always interest-only, with the full principal due as a balloon payment when you sell or refinance. Bridge loans work the same way: they carry you from acquisition to a permanent exit.

Because the lender takes on more risk and moves quickly, the pricing reflects it. Annual rates frequently land between 10% and 14%, and the loan carries upfront points on top of that. The combination is what makes the true cost so easy to underestimate.

The three costs that add up

Every hard money loan has three cost layers, and this calculator separates them so none gets lost:

Points are an origination fee charged as a percentage of the loan, paid in full at closing. Three points on a $216,000 loan is $6,480 — gone on day one, regardless of how the project performs. Interest on a monthly-rate, interest-only loan is simply the monthly rate times the loan balance, repeated for every month you hold. Other fees — appraisal, underwriting, document prep, inspections — are smaller but real, and lenders rarely volunteer the full list up front.

Why the effective APR is the number that matters

A loan quoted at "1% per month" sounds like 12% a year, and the interest alone is. But you also paid points and fees that the headline rate ignores. The effective APR folds those upfront costs into the annualized rate, and on a short hold the effect is dramatic: a fee paid once is spread across only a few months, so it inflates the annual cost sharply.

Consider a six-month hold: three points plus a 12% annual interest rate produces an effective APR closer to 18–19%, not 12%. The shorter the hold, the more the points dominate. This is the single most useful reason to run the numbers — the rate on the term sheet is not the rate you pay.

The break-even figure flippers actually need

The break-even profit shown here is the minimum gross profit your flip must clear just to cover the financing — points, interest, and fees combined. It is not your total break-even. To find that, you also have to add your cash invested, acquisition and closing costs, the rehab you funded out of pocket, holding costs like taxes and utilities, and the agent commissions and closing costs on the sale. The financing break-even is the floor beneath all of that: if the deal cannot clear this number, the loan alone has erased your profit before any other expense is counted.

Reading this calculator's output

The loan amount is derived from your purchase price plus rehab budget, multiplied by the loan-to-cost percentage the lender funds. The remainder is your cash in the deal, shown separately, because that capital is at risk and should be counted when you judge return. Total financing cost is the headline number; the breakdown beneath it shows how much is points versus interest versus fees, which is where you negotiate. Lowering points by one or shortening the hold by a month often moves the total more than haggling over the rate.