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Hard Money Loan Calculator

Calculate hard money loan cost, points, interest, and cash needed. See if your deal still works before you borrow.

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Total Cost
—fill in fields below

Loan Details

$
%

Typical hard money rates often range from 10%–15%, but vary by lender, market, borrower, and deal risk.

months

Typical hard money terms often range from 6–24 months.

%

Typical hard money points often range from 2%–4% of loan amount.

Fees & Costs

$
$
$

Interest reserve is prepaid interest held by the lender. It increases cash needed at closing but should not be counted again as extra interest cost.

$

Use this if you expect to pay for a loan extension.

$

Use this only if your lender charges a prepayment penalty.

Project Details

$

Used to calculate LTC (Loan-to-Cost).

$

Used to calculate As-Is LTV.

$

Used to calculate ARV LTV. Most hard money lenders cap at 70%–75% ARV LTV.

Enter loan amount, rate, term, and points to see your total financing cost.

What Is a Hard Money Loan?

A short-term loan based on the deal — not your income. Hard money lenders focus on the property's value and the project's potential, not traditional borrower qualifications.

Typical: 10%–15% rate, 2%–4% points, 6–24 months

Quick Example

  • • Loan: $250,000 at 12% for 6 months
  • • Interest: ~$15,000
  • • Points (2%): ~$5,000
  • • Total financing cost: ~$20,000 (~8% of loan)
  • • Extend to 9 months → +$7,500 more interest

Hard money is useful for:

  • • Fix-and-flip projects
  • • Bridge financing
  • • Fast closings
  • • Non-qualifying borrowers

Hard money is NOT:

  • • Cheap financing
  • • A long-term hold strategy
  • • Guaranteed approval
  • • A substitute for deal analysis

Important Context

  • • Hard money is expensive financing — that is the tradeoff for speed and flexibility
  • • Monthly payment is NOT total cost — total cost = interest + points + fees
  • • Exit strategy is critical — hard money only works if you exit on time
  • • This is an estimate, not a lender quote — actual terms vary by lender

How to Use This Calculator

  1. 1

    Enter the loan amount

    The total hard money loan you plan to borrow.

  2. 2

    Enter rate, term, and points

    These three inputs drive the majority of your financing cost.

  3. 3

    Add fees and closing costs

    Include origination fees, closing costs, and interest reserve if applicable.

  4. 4

    Enter project details (optional)

    Add total project cost and ARV to see LTC, LTV, and ARV LTV leverage ratios.

  5. 5

    Read total cost and decide

    If financing cost eats your profit, the deal may not work with hard money.

Hard Money Loan Formulas

Monthly Payment = Loan Amount × (Annual Rate / 12)
Total Interest = Monthly Payment × Term (months)
Points Cost = Loan Amount × Points %
Total Financing Cost = Interest + Points + Fees + Closing + Extension + Penalty
Cash at Closing = Borrower Gap + Points + Fees + Closing + Interest Reserve
LTC = Loan / Total Project Cost
As-Is LTV = Loan / As-Is Value
ARV LTV = Loan / After-Repair Value

Interest Reserve is prepaid interest held by the lender. It increases cash needed at closing but is NOT added to total financing cost — it is already part of total interest.

What Really Drives Hard Money Cost

Interest Rate

Higher rate = higher monthly cost. Even 1% difference on a $300k loan adds $250/mo.

Points

Upfront cost paid immediately. 3 points on $300k = $9,000 before you start.

Time

The longer you hold, the more you pay. Time is the hidden killer — 3 extra months on a $300k loan at 12% = $9,000 more.

What Your Result Means

LOW COST — Below 5% of loan

Financing cost is manageable relative to the loan. Short hold, reasonable rate. Profit margin should survive if the deal is solid.

MODERATE — 5% to 10% of loan

Common range for typical hard money deals. Verify that your projected profit still makes sense after this cost.

HIGH — 10% to 15% of loan

Financing drag is significant. Delays or cost overruns could erase the deal. Stress-test before committing.

VERY HIGH — Above 15% of loan

Financing cost is aggressive. Only viable if margins are exceptional. Most flips cannot absorb this level of financing drag.

ARV and Leverage

Hard money lenders typically cap ARV LTV around 70%–75%. If you exceed that, many lenders say no — others increase rate and points.

ARV LTV = Loan Amount ÷ After-Repair Value
LTC = Loan Amount ÷ Total Project Cost
As-Is LTV = Loan Amount ÷ Current Property Value

Check ARV LTV before shopping the deal. LTC, As-Is LTV, and ARV LTV are different metrics — lenders may use any combination. Do not confuse them.

Cash Needed at Closing

Hard money closing requires more than just the gap between loan and project cost. You also pay points, fees, and possibly interest reserve upfront.

Example

  • • Project: $300,000, Loan: $225,000
  • • Gap: $75,000
  • • + Points: $6,750
  • • + Fees + Closing: $3,000
  • • = Often $85,000+ cash needed

Exit Strategy Risk

Hard money only works if you exit on time. If you don't, interest keeps accruing, extension fees may apply, and profit shrinks. No exit = high risk.

A bad hard money loan turns winners into losers. 2 extra points + 3 months of delay = profit gone. Check your numbers before you sign.

Limitations

This calculator gives a realistic estimate — not a lender quote.

This calculator does:

  • • Show total financing cost
  • • Calculate cash needed at closing
  • • Show leverage ratios (LTC, LTV, ARV LTV)
  • • Flag risky leverage levels

This calculator does NOT:

  • • Model full draw schedules
  • • Include every lender fee
  • • Guarantee loan approval
  • • Promise profitability

Real Investment Insight

Hard money doesn't kill deals — bad assumptions do. The best investors calculate financing cost first, not last.

Be the investor who knows their numbers before talking to a lender.

Frequently Asked Questions

What is a hard money loan?

A short-term loan based on the deal — not your income. Typical terms: 10%–15% rate, 2%–4% points, 6–24 months. Used primarily for fix-and-flip and bridge financing.

What is the difference between LTC, LTV, and ARV LTV?

LTC (Loan-to-Cost) compares the loan to total project cost. LTV compares it to current as-is value. ARV LTV compares it to the projected after-repair value. Each metric serves a different purpose — lenders may use any or all of them.

Why is ARV LTV above 75% a red flag?

Most hard money lenders cap ARV LTV at 70%–75%. Above 75%, many lenders decline or offer worse terms. Higher ARV LTV also means less equity cushion if the project underperforms.

What is interest reserve?

Prepaid interest held by the lender at closing. It covers future monthly payments from day one. It increases cash needed at closing but does not add extra interest — it is part of total interest already.

Does this calculator guarantee loan approval?

No. This is an estimation tool. Actual approval depends on the lender, property, borrower experience, market conditions, and many other factors. Always verify terms with your lender.

How does time affect hard money cost?

Time is the hidden killer. Every additional month adds one more monthly interest payment. A 3-month delay on a $300,000 loan at 12% adds $9,000 in interest alone — before extension fees.

What is total financing cost vs monthly payment?

Monthly payment shows only interest. Total financing cost includes all interest, points, origination fees, closing costs, extension fees, and prepayment penalties. Always evaluate the total, not just the monthly number.

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