Hard Money Loan Calculator

How it works

Maximum loan = min(LTC × (purchase + rehab), loan-to-ARV × ARV) · monthly interest = loan × rate ÷ 12 · points = loan × points % · total cost = interest × months + points + fees · cash to close = purchase + rehab − loan + points + fees · annualized cost = total cost ÷ loan × 12 ÷ months

Hard money loans are short-term, asset-based loans from private lenders, used by real-estate investors to buy and renovate (fix and flip) or to bridge until long-term financing. Instead of income checks, the lender caps the loan at a share of total project cost (loan-to-cost, often 85%–90%) and of the after-repair value (often 65%–75%), charges interest-only at roughly 9%–15% and adds 1–4 points upfront. The calculator assumes the renovation budget is funded by the loan; many lenders release rehab money in draws, which lowers the interest actually paid.

Worked example

Buying at 200,000 with a 50,000 renovation (250,000 total cost) and a 350,000 ARV, a lender with 90% loan-to-cost and 70% loan-to-ARV lends min(225,000, 245,000) = 225,000. At 12% interest-only that is 2,250 a month, 13,500 over 6 months; 2 points add 4,500 and fees 1,500, so the loan costs 19,500.00 — 17.33% annualized. Cash to close is 250,000 − 225,000 + 4,500 + 1,500 = 31,000.

Sources: Investopedia — Hard money loan · Wikipedia — Hard money loan

Frequently asked questions