Hard Money Loan Calculator
A hard money loan is a short-term, asset-based loan for investors. Its cost is driven by points paid upfront and a high interest-only rate over a short hold. This calculator gives the loan amount, the points, the monthly payment, the total cost of capital, the cash you need to close and your loan-to-ARV ratio.
Use this hard money loan calculator to price a fix-and-flip or bridge deal before you commit. Enter the purchase price, the rehab budget and the after-repair value, then the down payment, rate, term and points — it returns the interest-only payment, the origination points in dollars, the total borrowing cost over the hold and the loan-to-ARV the lender will judge the deal by.
Enter the project and the loan terms, then press Calculate.
How the hard money loan calculator works
Hard money is priced differently from a normal mortgage, so it is worth breaking the cost into its parts. First the tool works out the loan amount: your down payment is taken off the purchase price, and the rehab budget is added on top, because most hard money lenders finance the renovation. Then it charges the points — an upfront origination fee equal to a percentage of that loan — and calculates the interest-only payment as the loan times the annual rate divided by twelve. Multiplying that payment by the term gives the total interest over the hold, and adding points, interest and other fees together gives the true cost of capital.
Two numbers decide whether a lender will say yes. The cash to close — down payment plus points plus fees — is what you must actually bring on day one, and the loan-to-ARV ratio compares the loan to the after-repair value the whole deal rests on. Investors pair this with a fix-and-flip analysis and the 70% rule to make sure the numbers leave room for profit. Hard money is a close cousin of the bridge loan.
The hard money formulas
- Down — cash down, a percent of the purchase price
- Rehab — renovation budget, financed on top
- ARV — the value once repairs are done
Why cost of capital matters more than rate
New investors fixate on the headline interest rate, but on a short hold the points often cost more than the interest. On the example above, two points is $5,520 due immediately, while a whole year of interest is about $31,740 — but if you finish and sell in four months, you pay only a third of that interest and the points do not shrink at all. That is why the total cost of capital, not the rate alone, is the number that decides a deal. Speed is your friend: the faster you renovate and exit, the smaller the interest bill relative to the fixed points, and the higher your return on the project.
Leave room in the deal
A hard money loan only makes sense if the after-repair value comfortably covers the purchase, the rehab, the cost of capital and your profit. Keep the loan-to-ARV inside what lenders accept — often around 65% to 70% — and stress-test the plan for a longer hold and a lower sale price than you hope for. Hard money rewards experienced operators with a reliable exit and punishes optimistic timelines, so build a cushion into both the budget and the schedule before you sign.
Hard money vs soft money
Investors split real estate financing into two camps. Hard money is asset-based: the loan is secured mainly by the property and the deal, so approval is fast, credit matters less, and the money is expensive — typically double-digit rates plus several points, over a short term of six to eighteen months. It is built for investors and flippers who need speed and will exit quickly through a sale or refinance. Soft money is the opposite: traditional, credit-based lending such as bank loans and conventional mortgages, with much lower rates, longer terms and slower, more thorough underwriting that leans on your income and credit score. Soft money is cheaper and suited to owner-occupants and long holds; hard money is dearer but fast and flexible where a bank would say no. The right choice depends on how quickly you need funds, how strong your credit is, and how soon you will pay the loan back.
Estimate only — not a loan offer or financial advice. Hard money terms vary widely by lender and deal. Confirm points, rate, fees and loan-to-ARV limits with your lender.
How to use it & key terms
Enter the purchase price, rehab budget and after-repair value, then the down payment, rate, term, points and other fees, and press Calculate to see the payment, points, total cost and loan-to-ARV.
| Term | What it means |
|---|---|
| Hard money loan | A short-term, asset-based loan secured by the property. |
| Points | An upfront origination fee; 1 point = 1% of the loan. |
| ARV | After-repair value — the property's value once rehab is done. |
| Loan-to-ARV | The loan divided by ARV; lenders usually cap it near 70%. |
| Interest-only | Paying only interest, so the full loan is repaid at the end. |
| Cost of capital | Points + interest + fees — the total price of borrowing. |
Sources & methodology
The calculator sets the loan amount as the purchase price minus your cash down payment plus the financed rehab budget. Points are that loan multiplied by the points percentage, charged upfront. Because hard money is almost always interest-only, the monthly payment is the loan times the annual rate divided by twelve, and total interest is that payment multiplied by the number of months in the term. The total cost of capital is points plus total interest plus other closing costs, cash to close is the down payment plus points plus other costs, and loan-to-ARV is the loan divided by the after-repair value.
Sources: Standard interest-only and origination-point conventions used across private and hard money lending for fix-and-flip and bridge financing.
Why the exit plan matters more than the loan
With hard money, the loan is only half the decision — the other half is how you get out of it. These loans are short by design, often lasting only long enough to buy, improve and either sell or refinance a property. Because interest accrues every month with no principal being repaid, time is the enemy: a project that runs months over schedule quietly eats the profit that made the deal worth doing. Before signing, an investor should be able to state the exit in a single sentence.
There are two common exits. The first is the sale: buy undervalued, renovate, and sell for enough to repay the loan, the points and the carrying costs while leaving a margin. The second is the refinance, where an investor uses hard money to acquire and stabilise a property quickly, then replaces it with a cheaper long-term mortgage once the work is done and the property qualifies. Each exit carries its own risk — a sale depends on the resale market holding up, while a refinance depends on the property appraising and on the borrower still qualifying when the term ends.
The speed that makes hard money useful is also what makes it unforgiving. A private lender can often fund in days rather than weeks, letting an investor compete for a property a conventional buyer would lose. That speed is bought with high rates and points, so it only pays off when it unlocks a deal — a distressed seller, an auction, a time-sensitive purchase — that ordinary financing could not reach in time. Using hard money for a deal a bank would happily fund simply burns money.
The safeguard is to build slack into every assumption. Budget the rehab high, the timeline long and the resale conservative, and confirm the exit still works even if all three drift against you. Keep a reserve for extra months of interest, and never rely on a refinance that needs perfect conditions to close. Hard money rewards investors who plan for the deal going sideways and punishes those who assume everything will go right. If a slower loan would still meet the deadline, our bridge loan calculator is worth a look before committing to hard-money pricing.
Frequently asked questions
What is a hard money loan?
A hard money loan is a short-term, asset-based loan secured by the property itself rather than by your income or credit. It is used mostly by real estate investors and house flippers who need to close fast or who cannot qualify for a conventional loan. Because the lender is private and the risk is higher, rates and fees are far above a normal mortgage, and the term is usually only six to eighteen months.
What are points on a hard money loan?
Points are an upfront origination fee charged as a percentage of the loan amount, paid at closing. One point equals one percent of the loan. Hard money lenders typically charge two to four points, so on a $276,000 loan two points is $5,520 due on day one. Points are a real cost of borrowing that this calculator adds to your total cost of capital and your cash to close.
What is the loan-to-ARV ratio?
Loan-to-ARV compares the loan amount to the after-repair value — what the property should be worth once the rehab is finished. It is the key limit most hard money lenders use, and many cap the loan at about 65% to 70% of ARV to protect their downside. A lower loan-to-ARV means more cushion for the lender and usually an easier approval; this calculator shows the ratio so you can see whether a deal fits.
Why are hard money interest rates so high?
Hard money is priced for speed, flexibility and risk. The lender funds quickly, accepts properties and borrowers that banks reject, and takes on the danger that a flip goes wrong. To be paid for that risk over a very short hold, rates commonly run from about 10% to 15% or more. The high rate matters less than it sounds because the loan is held only a few months, but it still needs to fit inside your deal's profit margin.
Are hard money payments interest-only?
Almost always, yes. During the short hold you normally pay interest only, so the monthly payment is the loan amount times the annual rate divided by twelve, and the full principal is repaid in one lump sum when you sell or refinance. This keeps monthly outgoings lower while you renovate, but it means none of the balance is paid down along the way — the whole loan is still owed at the end.
How much cash do I need to close a hard money loan?
Your cash to close is mostly the down payment plus the points and any other closing costs. Many hard money lenders finance the full rehab budget but require you to put down a share of the purchase price, and the points and fees are due upfront. This calculator adds the down payment, the points and the other closing costs together so you can see the true amount you must bring to the table before the project even starts.
Can you get a hard money loan for a primary residence?
Rarely, and with extra hurdles. Hard money is designed for investment and business property, where consumer lending rules do not apply. A loan on a home you will live in is a consumer loan subject to strict federal protections, so most hard money lenders avoid owner-occupied deals or apply heavy ability-to-repay checks. When it does happen, it is usually a short-term bridge for someone with strong equity who plans to refinance into a normal mortgage quickly. For a home you will keep, a conventional mortgage is almost always cheaper and safer.
What is the difference between LTV, LTC and LTARV?
They are three ways a hard money lender caps the loan. LTV, loan-to-value, compares the loan with the property's current value. LTC, loan-to-cost, compares it with your total project cost of purchase plus rehab, and lenders often lend up to around 80 to 90 percent of cost. LTARV, loan-to-after-repair-value, compares the loan with the value once the work is done, commonly capped near 65 to 75 percent. A lender usually applies whichever limit is most conservative.
Can you get hard money with bad credit or no credit check?
Often, yes, because hard money leans on the property and the deal more than your credit score. Some lenders advertise no credit check, but that is a simplification: even asset-based lenders assess you, your experience and your exit plan, and weak credit can still raise your rate or your required down payment. The equity in the deal is what really carries the loan, so a strong property and a clear exit matter more than a perfect score.