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.
Underwriting, appraisal, and document prep — quoted as dollars, not points.
The most the lender will advance against total project cost.
The lender's second ceiling. Whichever cap is lower is the loan you actually get.
Approximates rehab draws paid out over time, instead of accruing interest on the full loan from day one.
Charged per started extension period when the project runs past term — not pro-rated.
Loan amount
$222,300
Cash to close
$30,641
Effective rate
15.12%
A 6-month loan quoted at 11.5% costs 15.12% annualized once points and fees are counted — 3.62 points above the rate on the term sheet.
Origination points 2% of the funded loan, paid at closing | $4,446 |
Lender fees Underwriting, appraisal, and doc prep | $1,495 |
Total interest Interest-only over 6 months, drawn progressively | $10,865 |
| Total loan cost | $16,806 |
Payment once fully drawn
$2,130
Average monthly interest
$1,811
Lenders quote two ceilings and fund the lower one. Raising the cap that isn't binding won't get you a dollar more.
Hard money is priced to be repaid on time. Extension fees are charged per started period, so running one month over costs the same as running three.
| Scenario | Total loan cost | vs. quoted |
|---|---|---|
On schedule The term you were quoted | $16,806 | — |
+2 months 1 extension plus 2 more months of interest | $22,651 | +$5,845 |
+4 months 2 extensions plus 4 more months of interest | $28,495 | +$11,689 |
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 a progressively drawn balance rather than the full loan from day one, because rehab funds are released against completed work. Modeling the full balance from closing — as most calculators do — overstates your interest cost materially.
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.