Calculate total costs of hard money bridge financing for real estate investments. Compare points, interest, fees, and estimate your total repayment for fix-and-flip and short-term projects.
📊 Loan Summary
Total Loan Amount
$0.00
Principal borrowed
Points Fee
$0.00
Loan Amount × Points%
Origination Fee
$0.00
Lender origination charge
Total Interest
$0.00
Interest over full term
Total Fees
$0.00
Points + origination + closing
Total Repayment
$0.00
Principal + interest + fees
Monthly Payment
$0.00
Interest-only payment
Effective APR
0.00%
Including points and fees
Loan-to-Value
0.00%
LTV ratio
Cost Item
Amount
% of Loan
📋 Loan Analysis
📋 Detailed Cost Breakdown
This breakdown shows each cost component of a hard money loan so you can see exactly where your money goes. Hard money lenders structure their loans with several distinct fee types:
Total Repayment = Principal + (Interest × Term) + Points + Origination + Other Fees
Hard money loans are interest-only, meaning you pay interest each month without reducing principal
💰
Points Fee
Each point equals 1% of the loan amount, paid upfront at closing. For a $200,000 loan with 3 points, that's $6,000 in points. Points are the lender's origination profit.
📈
Total Interest
Interest accrues monthly on the full loan principal since hard money loans are typically interest-only. At 12% APR on $200,000, that's $2,000/month or $24,000 over 12 months.
📋
Origination & Closing
Origination fees (1-3% typical) cover underwriting and processing. Other closing costs include appraisal, title search, escrow, and legal fees — usually $1,000-$3,000.
Example Scenario
Fix-and-Flip Example: $350,000 ARV
Property Value (ARV): $350,000
LTV: 70% → Loan Amount: $245,000
Interest Rate: 12% APR
Term: 12 months
Points: 3 points ($7,350)
Origination Fee: $2,500
Other Costs: $1,500
Monthly Interest Payment: $2,450
Total Interest (12 months): $29,400
Total Fees: $11,350
Total Repayment: $285,750
📖 How Hard Money Loans Work
Hard money loans are short-term, asset-based loans secured by real estate. Unlike traditional bank loans that focus on credit scores and income, hard money lenders primarily evaluate the property's value (the collateral). These loans are typically used by real estate investors for fix-and-flip projects, bridge financing, and other short-term needs.
Key Factors That Affect Your Loan Cost
🏠 Loan-to-Value (LTV)
Most hard money lenders lend 60-75% of the after-repair value (ARV). Higher LTV means more leverage but higher risk, often resulting in higher rates.
📊 Interest Rate (10-15% APR)
Hard money rates are significantly higher than conventional mortgages due to the short-term nature, higher risk, and faster funding. Rates vary by lender, market, and deal quality.
🔢 Points (2-4%)
Points are upfront fees paid to the lender. One point = 1% of the loan amount. Experienced lenders typically charge 2-4 points depending on deal complexity.
⏱️ Loan Term (6-24 Months)
Hard money is short-term bridge financing. Most loans run 6-24 months. The exit strategy (sale, refinance, or repayment) determines the appropriate term length.
Hard Money vs Traditional Loan Comparison
Feature
Hard Money Loan
Traditional Mortgage
Approval Time
3-7 days
30-60 days
Credit Focus
Minimal — asset-based
Strict credit & income checks
Interest Rate
10-15% APR
6-8% APR
Points / Fees
2-4% origination points
0-1% origination
Loan Term
6-24 months
15-30 years
Payment Type
Interest-only
Fully amortizing
Property Condition
Accepts as-is / distressed
Requires move-in condition
LTV
60-75% of ARV
80-97% of purchase price
Best for short-term bridge, fix-and-flip, and time-sensitive purchases
⚠️ Important: Hard money loans are expensive short-term financing solutions for real estate investors. They should NOT be used as long-term mortgage alternatives. Always calculate total costs including points, origination fees, and early repayment penalties before proceeding.
What Is a Hard Money Loan?
A hard money loan is a short-term, asset-based loan secured by real estate. Unlike traditional bank loans that rely heavily on credit scores, income verification, and debt-to-income ratios, hard money lenders focus primarily on the value of the collateral property — typically the after-repair value (ARV) for fix-and-flip investors.
These loans are issued by private investors or specialized lending companies rather than banks or credit unions. They provide quick capital (often funded in 3-7 days) for real estate investors who need to close deals fast, purchase distressed properties, or bridge a short-term financing gap.
Hard money loans are characterized by higher interest rates (10-15% APR), upfront points (2-4% of the loan amount), and short terms (6-24 months). They are typically interest-only, meaning the borrower pays monthly interest without reducing the principal balance, which is repaid in full at the end of the term — usually from the sale of the property or a refinance into conventional financing.
Key Formula: Total Cost = Principal + (Principal × Annual Rate × Term/12) + Points + Fees
Hard money lenders make money from three sources: points (upfront), interest (monthly), and origination/processing fees
Common Uses for Hard Money Loans
Fix-and-Flip: Purchase, renovate, and resell properties quickly — the most common use case
Bridge Financing: Cover a short-term gap between buying a new property and selling an existing one
Construction Loans: Fund ground-up construction or major renovations that traditional lenders won't touch
Foreclosure / Auction Purchase: Close quickly on distressed sales that require cash or rapid funding
Non-Warrantable Properties: Finance condos, mixed-use, or unique properties that don't meet conventional standards
Credit Repair Bridge: Allow investors with temporarily low credit to secure funding while improving their credit profile for eventual refinancing
A hard money loan is a short-term, asset-backed loan secured by real estate. Unlike traditional mortgages that evaluate credit scores, income, and debt ratios, hard money lenders focus primarily on the value of the property being used as collateral. These loans are typically provided by private investors or specialized lending companies, not banks. They offer fast funding (3-7 days) for real estate investors who need to close quickly, purchase distressed properties, or bridge a financing gap. Interest rates are higher (10-15% APR) and terms are shorter (6-24 months) compared to conventional loans.
What are typical interest rates for hard money loans?
Typical hard money loan interest rates range from 10% to 15% APR as of 2026. The exact rate depends on several factors: the loan-to-value ratio (lower LTV = better rates), the borrower's experience and track record, the property's condition and location, the loan term length, and the overall risk profile of the deal. Rates at the lower end (10-11%) are usually available for experienced investors with strong track records and lower LTV ratios. Higher rates (13-15%) apply to riskier deals such as raw land, construction projects, or borrowers with limited history. Some lenders also offer rate reductions for shorter terms or larger loan amounts.
How are points calculated on a hard money loan?
Each point equals 1% of the total loan amount. Points are upfront fees paid at closing that represent the lender's profit on the loan. For example, on a $250,000 loan with 3 points: Points Fee = $250,000 × (3 / 100) = $7,500. Most hard money lenders charge between 2 and 4 points. These fees are paid at closing and are separate from the interest you pay monthly. Points are sometimes negotiable — lenders may reduce points in exchange for a higher interest rate or vice versa. Always include points in your total cost calculation, as they significantly impact your effective APR and overall profitability on fix-and-flip projects.
What LTV can I expect with a hard money loan?
Most hard money lenders provide loans at 60-75% Loan-to-Value (LTV) based on the after-repair value (ARV) of the property — not the purchase price. This means if a property's ARV is $400,000, you could expect a maximum loan of $240,000 to $300,000. The lower LTV protects the lender by ensuring there's enough equity cushion if the borrower defaults and the property needs to be sold. Experienced investors with strong track records may qualify for the higher end (70-75% LTV), while riskier deals or less experienced investors might receive 60-65% LTV. Some lenders also consider the as-is value rather than ARV, which typically results in a smaller loan amount.
How long can I keep a hard money loan?
Hard money loans are designed as short-term financing with typical terms of 6 to 24 months. Some lenders offer terms as short as 3 months for quick flip projects, and a few may extend up to 36 months for larger bridge financing needs. The loan term should align with your exit strategy: if you're flipping a property, the term should cover the purchase, renovation, and sale timeline (usually 6-12 months). For bridge loans, the term should match the time needed to sell your current property or secure permanent financing. Extending beyond 12 months is possible but usually comes with higher rates or extension fees. Hard money loans should never be used as long-term mortgage alternatives due to their high interest rates and upfront fee structure.