What the loan really costs — points, fees, and interest included.
What you're paying for the property.
Lenders fund this in draws as the work is completed.
Recent comps within about a mile — the lender's appraiser will check.
How long the lender is quoting before the balance comes due.
Annual rate on the loan balance. This is the number lenders advertise — it isn't what the loan costs.
One point is 1% of the funded loan. On a short term, points cost more than the rate suggests.
What the wholesaler charges to assign you the contract. Leave at $0 if you're buying direct.
Title, escrow, transfer tax, and recording. Not a loan cost, but it's collected at the same closing.
What the lender wires at closing. You cover the rest as your down payment.
Usually financed in full, but released as draws once work is done — you front each stage and get reimbursed.
The lender's second ceiling. Whichever cap is lower is the loan you actually get.
Underwriting, appraisal, and document prep — quoted as dollars, not points.
Earned by the lender even if you repay sooner, and charged on the full loan.
Interest some lenders hold back from your loan proceeds instead of billing monthly. It raises cash to close and covers the payment for those months — it doesn't change what the loan costs. Leave it at zero if your lender bills you monthly.
How long the lender takes to inspect and fund a completed draw. You've already paid the contractor by then, so this is the money you float — it doesn't change what the loan costs, only how much cash the job needs at once. Count calendar days, not business days: ten is typical where draws turn around promptly, and a lender quoting two weeks is 14.
What you spend past the budget. The lender sized its holdback off the budget you gave it, so an overrun draws nothing — every dollar of it is your own, on top of the down payment. It defaults to the same contingency the flip calculator charges, so both pages price the overrun the same way. Set it to 0% to see the deal on the assumption the budget holds exactly.
Charged per started extension period when the project runs past term — not pro-rated.
Loan amount
$228,500
Cash to close
$28,265
Peak cash needed
$50,037
Most out of pocket, month 3.6
Effective rate
15.87%
A 6-month loan quoted at 11.5% costs 15.87% annualized once points and fees are counted — 4.37 percentage points above the rate on the term sheet.
Origination points 2% of the funded loan, paid at closing | $4,570 |
Lender fees Underwriting, appraisal, and doc prep | $1,495 |
Total interest Interest-only over 6 months, drawn progressively | $12,069 |
| Total loan cost | $18,134 |
Payment once fully drawn
$2,190
Average monthly interest
$2,012
Lenders quote two ceilings and fund the lower one. Raising the cap that isn't binding won't get you a dollar more.
Your equity in the project
All of it wired at closing — the lender advances the rehab budget in full
The down payment is the line everyone budgets for, not the only one. Points, lender fees, the third-party costs of buying, and any interest the lender escrows are all collected the same day.
Down payment Purchase price the lender won't advance — 10% of it | $18,500 |
Origination points 2% of the funded loan | $4,570 |
Lender fees Underwriting, appraisal, and doc prep | $1,495 |
Buy-side closing costs 2% of the purchase price — title, escrow, transfer tax | $3,700 |
| Cash to close | $28,265 |
A rehab draw is a reimbursement. You pay the contractor, submit the draw, and wait for the lender to fund it — so the money is out of your account before the loan replaces it. This is the number that runs flippers out of cash mid-project, and the closing wire above can't show it. It's priced on a budget that overruns by 15%, the same contingency the flip calculator charges — the months you're deepest in are the months an overrun lands, so a peak assuming the budget holds is the one you can't trust.
Cash to close Everything wired at the closing table, from the itemization above | $28,265 |
Rehab funded, not yet reimbursed $9,300 of overrun past the budget, plus $5,658 paid to the contractor, waiting on a draw the lender funds 10 days later | $14,958 |
Interest billed by then The payments made through month 3.6 — the rest of the term's interest comes due after the peak | $6,814 |
| Peak cash needed | $50,037 |
This deal is deepest underwater at month 3.6, with $50,037 of your own money in it — $21,772 more than the closing wire. Budget to the wire alone and that's the gap you'd have to cover from somewhere else.
The peak is one moment on a line that moves the whole term. It climbs while you're funding rehab faster than the lender reimburses it, drops as the last draws land, then creeps back up on interest alone.
Hard money prices both directions off the term you agreed to. Extension fees are charged per started period, and an early payoff only saves interest past the guaranteed months.
| Scenario | Total loan cost | vs. quoted |
|---|---|---|
Paid off at month 2 Inside the 3-month interest guarantee — repaying sooner saves no more | $12,634 | |
Paid off at month 4 2 fewer months of interest, and no extension fee | $14,111 | −$4,023 |
On schedule The term you were quoted | $18,134 | — |
+2 months 1 extension plus 2 more months of interest | $24,442 | +$6,308 |
+4 months 2 extensions plus 4 more months of interest | $30,750 | +$12,616 |
Everything above prices one term sheet. Put a second one in and the two are costed against the same deal — same property, same budget, same overrun — so the only thing that moves is what each lender is charging you.
Prefilled with the trade most lenders offer — a point off the rate, paid for in origination. Overwrite it with the quote you're actually holding.
| Figure | Quote A | Quote B | Difference |
|---|---|---|---|
Loan amount What each lender will actually fund against this deal | $228,500 | $228,500 — | |
Cash to close The wire on closing day — down payment, points, fees, and buy-side costs | $28,265 | $32,193 +$3,928 | |
Peak cash needed The most you're out of pocket at once, draws and overruns included | $50,037 | $53,372 +$3,335 | |
Monthly payment Interest-only, once the last rehab draw has funded | $2,190 | $1,999 −$190 | |
What the loan costs Interest, points, lender fees, and any extension fees over the term | $18,134 | $21,012 +$2,878 | |
Effective annual rate The note rate with points and fees annualized back into it | 15.87% | 18.39% +2.52% |
Quote A costs $2,878 less over the term. It also carries the higher note rate — Quote B advertises the cheaper rate and is the more expensive loan, which is the whole reason the rate alone can't settle this.
Hard money is short-term, asset-backed financing from a private lender — priced on the property rather than your income, and closed in days rather than weeks. The note rate is the least interesting number on the term sheet. Points and flat fees are paid once but earned over a term measured in months, so the same two points cost twice as much annualized on a six-month loan as on a twelve-month one. This calculator prices all three together and annualizes them, which is the only way to compare a low-rate-high-points quote against its opposite.
Interest here accrues on the balance actually outstanding rather than the full loan from day one. Your purchase advance funds at closing and carries the whole term; the rehab holdback is released against completed work, so it averages roughly half drawn while the job runs. That makes the discount a property of your deal, not a house assumption — a heavy rehab carries far less than its full loan, and a cosmetic buy with no holdback carries all of it from closing and gets no discount at all. Modeling the full balance throughout — as most calculators do — overstates interest on a rehab-heavy deal; applying a flat discount to every deal understates it on a light one.
Most fix-and-flip paper also guarantees the lender a minimum period of interest — commonly three months — earned whether or not you hold the loan that long. So a fast flip saves less than the rate implies: repaying a nine-month note at month two costs the same as repaying it at month three, and the guarantee is charged on the full loan rather than the drawn balance. It's the reason an early exit and a late one are both priced against the term you agreed to, and it's set in advanced options if your lender quotes something else.
Some lenders don't bill that interest monthly at all — they escrow it, holding the first few months back out of your loan proceeds at closing. It costs the same either way, so the effective rate doesn't move. What moves is when you pay it: your cash to close goes up by the whole reserve, and your out-of-pocket payment for those months goes to zero. Budget off the wrong one and you're short at the table on a deal you priced correctly. One wrinkle: the lender sets that holdback at closing, before there's a draw schedule to size it against, so it reserves against the full balance. Escrow most of the term and you'll wire more than a progressively drawn balance ever accrues — the difference is refunded at payoff, so it's cash you need to have, not cost you pay. Set it in advanced options if your term sheet quotes a reserve; leave it at zero if you're billed monthly.
Working out whether the deal itself makes money? Run it through the house flipping calculator — it carries these financing costs through to net profit and return.