The hard money loan calculator shows you the true cost of short-term financing — not just the interest rate, but origination points, monthly payments, and total cost over your hold period. A 12% hard money loan with 3 points on a $200K loan costs $18,000 over 6 months — that is an effective 18% annual rate. Plug in any deal and see the real numbers before you commit.
What Is a Hard Money Loan
Hard money is short-term, asset-based financing used by flippers and BRRRR investors. Per the CFPB, hard money loans are regulated as mortgage products. The lender cares about the property’s value (LTV) — not your income, credit score, or tax returns. Loans fund in 5–10 days vs 30–45 for Fannie Mae conventional.
| Feature | Hard Money | Conventional | DSCR |
|---|---|---|---|
| Rate | 10–14% | 7.0–7.5% | 7.5–8.5% |
| Points | 2–4 pts upfront | 0–1 pt | 0–2 pts |
| Term | 6–18 months | 30 years | 30 years |
| Speed | 5–10 days | 30–45 days | 21–30 days |
| LTV | 65–80% of ARV | 75–80% of price | 75–80% of price |
| Best For | Flips, BRRRR acquisition | Buy-and-hold | Scaling portfolio |
Hard money is a bridge — you use it to acquire and rehab, then refinance into permanent financing (conventional or DSCR) or sell. The hard money calculator helps you model the carrying cost during that bridge period.
How to Use the Hard Money Calculator
Step 1 — Loan Details
Enter loan amount (typically 70–80% of purchase price or 65–75% of ARV), interest rate (10–14%), and origination points (2–4%). The calculator computes your upfront point cost and monthly interest-only payment.
Step 2 — Hold Period
How many months until you sell (flip) or refinance (BRRRR). Typical: 4–6 months for flips, 3–6 months for BRRRR. Every extra month adds one more interest payment — this is where flips go wrong when rehab runs over schedule.
Step 3 — Additional Costs
Property tax during hold, insurance (builder’s risk policy), utilities. These are carrying costs on top of the loan. The hard money calculator totals everything so you see the full cost of the bridge period.
Step 4 — Read Results
Total cost = origination points + total interest + carrying costs. The calculator shows effective annual rate (accounting for points), monthly payment, and cost per month. Compare to your expected profit — if hard money costs exceed 50% of flip profit, the deal is too thin.
Worked Example 1: Fix and Flip — $250,000 Purchase
Property: SFR in Memphis, needs $50K rehab
Purchase: $250,000 · ARV: $350,000
Hard money: 80% LTV = $200,000 loan · 12% rate · 3 points
Hold: 6 months (3 months rehab + 3 months sell)
| Cost Component | Amount | Calculation |
|---|---|---|
| Origination points (3%) | $6,000 | $200,000 × 3% |
| Monthly interest | $2,000 | $200,000 × 12% ÷ 12 |
| 6-month interest total | $12,000 | $2,000 × 6 |
| Property tax (6 months) | $1,500 | $250K × 1.2% ÷ 2 |
| Insurance (6 months) | $900 | Builder’s risk $150/mo |
| Utilities (6 months) | $450 | $75/mo |
| Total carrying cost | $20,850 |
Total cost: $20,850. If your flip profit (ARV − purchase − rehab − selling costs) is $40,000, hard money eats 52% of it. That is tight but workable. If rehab runs 2 months over (8 months total), interest adds $4,000 and total cost becomes $24,850 — eating 62% of profit.
This is why the hard money calculator is essential: it reveals how schedule overruns destroy flip margins. For the full flip analysis, use the fix and flip calculator. For rehab budgeting, see the rehab cost estimator.
Worked Example 2: BRRRR Acquisition — $110,000 Purchase
Property: SFR in Greensboro, NC, needs $30K rehab
Purchase: $110,000 · ARV: $190,000
Hard money: 80% LTV = $88,000 loan · 11% rate · 2 points
Hold: 4 months (3 months rehab + 1 month lease-up before refi)
| Cost Component | Amount |
|---|---|
| Origination points (2%) | $1,760 |
| Monthly interest ($807 × 4) | $3,227 |
| Property tax (4 months) | $348 |
| Insurance (4 months) | $600 |
| Utilities (4 months) | $300 |
| Total carrying cost | $6,235 |
Total cost: $6,235. This is the “bridge tax” of BRRRR — the cost of using hard money to acquire before refinancing into a permanent loan. On a deal where you recover 95% of capital on refi ($139,650 back on $147,536 invested), $6,235 in hard money costs is baked into the all-in price. If you could pay cash instead, you save $6,235 but tie up $110K that could fund another deal.
Model your BRRRR cycle in the BRRRR calculator. For NC-specific BRRRR, see the NC BRRRR guide.
Hard Money Cost by Hold Period
| Hold Period | Interest ($200K at 12%) | + 3 Points | Total | Effective Annual |
|---|---|---|---|---|
| 3 months | $6,000 | $6,000 | $12,000 | 24.0% |
| 6 months | $12,000 | $6,000 | $18,000 | 18.0% |
| 9 months | $18,000 | $6,000 | $24,000 | 16.0% |
| 12 months | $24,000 | $6,000 | $30,000 | 15.0% |
Points are fixed regardless of hold — the shorter your hold, the more expensive points become as an effective rate. At 3 months, points alone add 12% to your annualized cost. This is why fast rehab timelines are critical. Check current rates at FRED mortgage data.
How to Choose a Hard Money Lender
| Factor | What to Compare | Red Flags |
|---|---|---|
| Rate | 10–14% range | Below 9% (probably bait, hidden fees) |
| Points | 2–4 points | 5+ points (too expensive) |
| LTV | 70–80% of purchase or ARV | “100% financing” (junk fees hidden) |
| Prepayment penalty | None or minimal | 6+ month minimum interest guarantee |
| Extension fees | $500–$1,000/month | Automatic rate increase on extension |
| Speed to close | 5–10 business days | 30+ days (not real hard money) |
| Draw schedule | Rehab draws in 3–5 disbursements | All rehab upfront (rare, risky for lender) |
Get quotes from 3+ lenders. The difference between 11% + 2 points and 13% + 3 points on a $200K loan over 6 months is $5,000. That is real money on a flip with $40K target profit. Per NAR, investor share of purchases is 20–25% nationally — hard money lenders are competing for this business.
5 Hard Money Mistakes
1. Not Budgeting Points as Day-One Cash
Why: 3 points on $200K = $6,000 due at closing. If you budgeted $50K down payment + $50K rehab = $100K cash needed, the actual need is $106K. Running out of cash mid-rehab kills deals.
Fix: Include points in your total cash-to-close calculation. The hard money calculator shows total upfront cost.
2. Underestimating Rehab Timeline
Why: Every month over schedule costs $2,000 in interest on a $200K loan at 12%. A “6-month flip” that takes 9 months adds $6,000 to your carrying cost — often the difference between profit and breakeven.
Fix: Budget 50% timeline contingency. If contractor says 3 months, model 4.5 months. Use the rehab cost estimator for realistic timelines.
3. Ignoring Extension Fees
Why: Most hard money loans have 6–12 month terms. If you can’t sell or refi in time, extension fees ($500–$2,000/month) and rate increases kick in. Some lenders add 2–3% rate premium on extensions.
Fix: Read the extension terms before signing. Budget for at least 2 months of extension in your worst-case scenario.
4. Using Hard Money for Buy-and-Hold
Why: Hard money at 12% + 3 points = $18,000/year on $200K. Conventional at 7% = $16,761/year — and it is a 30-year fixed, not a 12-month balloon. Hard money for buy-and-hold is burning money.
Fix: Use hard money ONLY as a bridge — acquire, rehab, then refi into conventional or DSCR. Compare long-term options in the investment property mortgage calculator.
5. Not Comparing Total Cost to Flip Profit
Why: If hard money costs $20,850 and flip profit is $25,000, you keep only $4,150 after financing — a 2% return on $100K+ invested. Not worth the risk.
Fix: Hard money cost should be less than 40% of expected profit. If it exceeds 50%, the deal is too thin. Run the numbers in the fix and flip calculator before committing.
Frequently Asked Questions
How much does a hard money loan cost?
Total cost = origination points (2–4% upfront) + monthly interest (10–14% annually). On a $200K loan at 12% with 3 points over 6 months: $6,000 points + $12,000 interest = $18,000 total. Effective annual rate: 18%. Use the hard money calculator to model your specific deal.
What are hard money loan points?
What LTV do hard money lenders offer?
How fast can I close with hard money?
Is hard money good for BRRRR?
What credit score do I need for hard money?
Related Calculators and Guides
- Hard Money Loan Calculator — Total cost with points and interest
- Fix and Flip Calculator — Full flip profit analysis
- BRRRR Calculator — Buy, rehab, rent, refinance, repeat
- ARV Calculator — After-repair value estimation
- Rehab Cost Estimator — Room-by-room rehab budget
- 70% Rule Calculator — Maximum offer for flips
- LTV Calculator — Loan-to-value ratio
- DSCR Calculator — For refinance qualification
- Mortgage Calculator — Compare permanent financing
- All 30+ Calculators
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