Hard Money Loan Calculator
Last updated: August 2026
On a short-term loan the headline rate is the least important number. Points are paid on day one and do not amortise, so over eight months two points can cost more than a two-percent difference in rate. This calculator gives you the effective annualised cost, which is the figure that makes two lenders comparable.
Quick cost calculation
The gap between those two percentages is the points. They are charged on day one and do not amortise, so the shorter the hold, the more they cost in annualised terms. On a four-month project two points is the equivalent of adding six percent to the rate.
What points cost, by how long you hold
Origination points down the side, months held across the top. Each cell is what the points alone add in annualised terms — on top of the interest rate.
| Points ↓ / Months → | 3mo | 4mo | 6mo | 8mo | 10mo | 12mo | 18mo | 24mo |
|---|---|---|---|---|---|---|---|---|
| 1 | +4.0% | +3.0% | +2.0% | +1.5% | +1.2% | +1.0% | +0.7% | +0.5% |
| 1.5 | +6.0% | +4.5% | +3.0% | +2.3% | +1.8% | +1.5% | +1.0% | +0.8% |
| 2 | +8.0% | +6.0% | +4.0% | +3.0% | +2.4% | +2.0% | +1.3% | +1.0% |
| 2.5 | +10.0% | +7.5% | +5.0% | +3.8% | +3.0% | +2.5% | +1.7% | +1.3% |
| 3 | +12.0% | +9.0% | +6.0% | +4.5% | +3.6% | +3.0% | +2.0% | +1.5% |
| 4 | +16.0% | +12.0% | +8.0% | +6.0% | +4.8% | +4.0% | +2.7% | +2.0% |
Read the top-left corner. Two points on a three-month flip is the equivalent of adding eight percent to the rate. The same two points over two years adds one percent. Nothing about the loan changed — only how long you held it.
Which produces a conclusion most borrowers get backwards: on a fast project, negotiate the points. On a slow one, negotiate the rate.
Full calculator
Sizes the loan against both limits, adds every fee, and gives the true cost and the cash you need to bring.
- Limit by loan-to-cost
- $202,500
- Limit by loan-to-ARV
- $227,500
- Loan offered — the lower
- $202,500
- Interest
- $12,723
- Origination points
- $4,050
- Fees, including 4 draws
- $2,850
- Total cost
- $19,623
- Cash you must bring
- $25,500
Estimates only. Lenders differ on whether interest accrues on the drawn balance or the full commitment, on extension terms, and on what counts as a draw.
How the loan is sized
Two constraints, and the lower one binds.
| Constraint | Typical | On a $325,000 ARV deal |
|---|---|---|
| Loan-to-ARV | 70–75% of after repair value | 70% × $325,000 = $227,500 |
| Loan-to-cost | 85–90% of purchase + 100% of rehab | 85% × $170,000 + $58,000 = $202,500 |
| Loan offered | The lower | $202,500 |
The lender uses its own ARV, not yours. It orders a valuation and lends against that figure. A gap between your number and theirs comes out of your pocket, and it is the most common reason a deal that penciled at offer needs more cash at closing than expected.
The costs that are not the rate
| Cost | Shape | Notes |
|---|---|---|
| Origination points | 1–3% of the loan | Day one, does not amortise |
| Interest | Well above conventional | Often interest-only, paid monthly |
| Doc and lender fees | Flat | Ask for the full schedule in writing |
| Valuation | Flat | Their appraiser, their number |
| Draw inspection | Per draw | Four or five draws is normal |
| Extension fee | Often a point | If the project runs past term |
The extension fee is the one that catches people.Renovations run late. A twelve-month loan on a project you believed was six months is cheap insurance compared with paying a point to extend at month seven.
The question to ask every lender
Does interest accrue on the drawn balance or the full commitment?
Some lenders charge interest on the whole loan from day one, including renovation funds still sitting in escrow. Others charge only on what has been drawn. On the example above — a $202,500 loan with $58,000 of it undrawn at the start — eight months of that difference is thousands of dollars, and it never appears in a rate comparison.
The toggle in the calculator above switches between the two so you can see the size of it on your own numbers.