This hard money loan calculator shows every dollar your deal costs before signing on the dotted line. Enter the purchase price, rehab budget, after repair value, interest rate, points, and loan term. The hard money calculator returns your loan amount, monthly payments, total interest paid, total cost, cash contribution, and net profit. A hard money loan only makes sense when the numbers work. Use the interactive tool below, then check the worked examples to sanity check your numbers. This article includes a full breakdown for any buyer or borrower ready to run the numbers in any area.
Assumes 100% of rehab funded through draws, interest charged on the full loan amount, and 2% buyer-side closing costs. Estimates only; term sheets control.
Every hard money loan has six inputs. Change one and every output shifts. This money loan calculator breaks loan terms and loan costs into line items so real estate investors can evaluate a project, determine if it is worth taking on, and make wise funding decisions before committing working capital.
A borrower finds a distressed house in Houston to purchase property, renovate it, and sell. Here is every step of the hard money loan calculator for this project. This example helps real estate investors estimate total costs and returns before taking on a hard money loan and signing loan documents.
Step 1, loan amount: 75% of ARV = $240,000. The loan covers the full purchase ($180,000) plus rehab ($60,000). LTV against ARV is 75%.
Step 2, origination fees: 2% x $240,000 = $4,800. Fees vary depending on lender terms and borrower experience. Many lenders offer lower points to repeat borrowers making multiple transactions.
Step 3, monthly payments: ($240,000 x 11%) / 12 = $2,200. The structure is interest only, making hard money loan payments predictable, easy to budget, and simple to control.
Step 4, total interest: $2,200 x 9 = $19,800. Sell in 6 months and total interest drops to $13,200. The hold period is the biggest lever. Pay the hard money loan early and save money.
Step 5, total cost: Origination ($4,800) + interest ($19,800) + other costs ($4,400 for title insurance, closing costs, appraisal) = $29,000. This is every dollar you pay for the financing. The total includes all fees, interest, and closing costs in one number.
Step 6, cash to close: $4,800 + $4,400 = $9,200. Additionally, budget carry (property taxes, insurance, utilities): roughly $3,600 over 9 months to cover those expenses. Total cash needed: about $12,800 out of pocket.
Step 7, net profit: Sale price $320,000 minus purchase $180,000, minus rehab $60,000, minus loan costs $29,000, minus sale costs including real estate commissions and transfer fees (8%: $25,600) = $25,400. The deal makes sense.
This table shows how hard money loan calculator math plays out across three investment property types. Same LTV (75% ARV), same rate (11%), same points (2).
| Line Item | Deal A: Light Flip | Deal B: Heavy Flip | Deal C: Bridge Loan |
|---|---|---|---|
| Purchase price | $150,000 | $120,000 | $275,000 |
| Rehab | $25,000 | $100,000 | $0 |
| After repair value | $240,000 | $320,000 | $340,000 |
| Loan amount (75% ARV) | $175,000 | $220,000 | $255,000 |
| Down payment | $0 | $0 | $20,000 |
| Origination (2 pts) | $3,500 | $4,400 | $5,100 |
| Monthly payments | $1,604 | $2,017 | $2,338 |
| Loan term | 6 months | 12 months | 6 months |
| Total interest | $9,625 | $24,200 | $14,025 |
| Total cost | $16,625 | $33,100 | $23,125 |
| Cash to close | $7,000 | $8,900 | $28,600 |
| Profit (after 8% sale costs) | $29,175 | $41,300 | $14,675 |
Deal A is a cosmetic flip with low renovation costs and a short hold. Deal B is heavy rehab with a 12 month term; the larger spread produces the biggest return even with higher loan costs. Deal C is a bridge loan; the borrower plans to transition into long term financing within 6 months. Run at least two scenarios before committing to any hard money loan. It is important to understand how different loan terms, interest rates, and hold periods change the outcome. The right loan structure for one property may be the wrong choice for another.
Here is how experienced borrowers and lenders read the hard money loan calculator output when making funding decisions. In each case, the ideal approach is to prepare deal numbers in advance, help the lender qualify the project quickly, and ensure the hard money loan is structured to cover the full scope of the investment. Banks and traditional lenders apply a different type of underwriting that includes income verification; hard money lenders focus on the asset and the position in the property. These recommendations apply whether you buy a home to flip, acquire a rental property for long term income, or start a bridge transaction. Making good financing decisions requires understanding what each number means and how the lender evaluates the deal from the underwriting side. In some cases the lender will offer alternatives with structured payment terms that require less equity. The reasons borrowers choose hard money financing over bank loans are clear: speed, flexibility, and asset based lending that does not depend on credit score or income. But the interest rate, loan payment amounts, and fees must still work in the numbers.
Total cost vs. returns. If total cost exceeds 40% of expected returns, margins are thin. One overrun erases the return. Target loan costs below 25% of projected returns. Knowing this helps you avoid expensive situations where a project looks good but fails when you account for real borrowing costs.
Cash to close and equity. The calculator shows working capital a project needs. Your equity position (down payment relative to property value) provides protection for both lender and borrower. Most lenders need at least 10% borrower equity to approve funding. In this case, if you lack capital, access gap funding or find a partner. The lender needs to see that borrowing against the home is justified.
Monthly payments and carry. Monthly payments are not the only carry cost. Add property taxes, insurance, and utilities. If monthly payments plus carry exceed $3,000 on a house, sell within the planned hold period or the project bleeds. Payments accrue whether renovations are on schedule or not. Interest continues to accrue on the outstanding loan balance every month. Enter realistic estimates.
The balloon payment. Every hard money loan ends with a balloon payment: the full loan balance due at the end of the loan. If you cannot sell or refinance, you risk default. Plan your exit strategy around this date. Unlike a traditional mortgage, there is no amortization.
Not every project passes the hard money loan calculator test. Watch for these common signs. Taking on a hard money loan that fails these rules is expensive and difficult to walk away from. Sellers and buyers alike should apply these checks before acquiring any investment property.
Most hard money loans are structured with interest only payments and a balloon payment at the end of the loan term. This keeps monthly payments low, preserves working capital, and lets borrowers deploy capital where it generates the most return. Hard money loan payments cover only the interest. The full balance is repaid in a single balloon payment when the property sells or the borrower refinances. This differs from traditional loans where each loan payment includes a portion of principal. Knowing how the repayment terms work helps borrowers set expectations, plan an exit strategy, and understand what they pay each month. The payment structure is one of the most important factors that the lender should understand before signing any hard money loan terms. Most hard money lenders charge no prepayment penalty, so pay the hard money loan early and save money on total interest. This is a common, simple structure and one reason real estate investors choose short term financing over bank loans for investment property projects. Unlike commercial real estate loans or a traditional lender's terms, hard money loan terms are designed for speed. Borrowers access funding quickly, renovate the property, sell or refinance, and move to the next deal. The process typically takes 6 to 12 months from acquisition to sale, and the loan terms match that timeline. The percentage of each payment that goes toward interest is 100%, compared to amortizing forms of financing where you pay down principal each month. Refer to our rates page for current hard money loan rates by loan type.
Kestrel Lending is a Texas hard money lender broker. We shop your project to 20+ wholesale lenders and lending companies to help you secure the best hard money loan terms. Rates, origination fees, and repayment terms vary depending on the lender. One lender quotes 12%. Another quotes 10.5%. A third offers 11% with different terms but requires a larger down payment. We compare options, factor in closing costs and additional fees, negotiate better rates on your behalf, and find the cheapest total cost for your project and investment goals. That is the advantage a broker offers: access to multiple lenders, companies, and loan alternatives you cannot easily reach on your own.
Use this money loan calculator to estimate your numbers, then request a quick approval quote. We broker business-purpose hard money loans on investment property only. Loan programs include fix and flip loans, bridge loans, rental DSCR, and more. We provide funding across Texas: Houston, Dallas, Fort Worth, San Antonio, and Austin. Check rates on our rates page for today's pricing.
Multiply the loan amount by the annual interest rate, then divide by 12. On a $200,000 hard money loan at 12%, the monthly interest only payment is $2,000. Most hard money loans use interest only payments. Use this hard money loan calculator to find exact numbers for your project.
A balloon payment is the full loan balance due at the end of the loan term. On a 12 month loan for $200,000, the balloon payment is $200,000 repaid when the property is sold or refinanced. Lenders expect repayment through sale or refinance. Plan your exit strategy around this date and prepare to close on time. In this situation, the loan payment is due in full. Lenders expect borrowers to default less when the exit plan is clear from the application stage.
Most hard money lenders charge 1.5 to 3 points. On a $250,000 loan, 2 points equals $5,000. Origination fees vary depending on the lender, loan size, and borrower track record. Making the effort to compare quotes from multiple lenders and companies helps borrowers secure better rates and terms, potentially saving thousands. The lender may also offer to reduce points for borrowers with strong credit scores or repeat borrowers who provide consistent deal flow year after year.
Yes. Most hard money loans carry no prepayment penalty. If your term is 12 months but you sell in month 7, you pay only 7 months of interest. Early payoff helps with recouping capital quickly for the next deal and reduces total cost. The loan is designed for fast in, fast out. It is an ideal type of financing for investors who need to lend less time to each project and move capital into the next house.
Most lenders offer up to 75% of after repair value and up to 90% of purchase price. The maximum loan amount depends on the lower calculation. Higher loan to value typically means a smaller down payment but higher interest rates. Terms vary depending on lender, credit score, and property type. If you are unsure which LTV applies to your situation, contact a lender or broker to discuss options based on your deal.
A hard money loan is short term financing secured by investment property used as collateral. A conventional mortgage is long term financing for homeowners and owner-occupied homes. Hard money lenders underwrite the project and the asset, based on collateral and ownership of equity. Banks and traditional lenders underwrite credit, income, and the borrower. Hard money loan payments are interest only with a balloon payment, while a conventional mortgage amortizes over the full term. Lenders typically process a hard money loan in 7 to 14 days, compared to 30 to 45 days at banks. You can expect fast funding and a faster loan process. The difference in time creates a real advantage for investors who need to close quickly and hold the property for a short term period before sale. Unlike California, Texas has no state income tax, which means hard money loan profits are taxed differently. California and other high-tax states reduce flip returns; Texas keeps more in the investor's pocket.
No. Many lenders fund first-time borrowers and buyers, though newer investors typically qualify for lower leverage and higher rates. Your rehab and exit strategy matter more than years of experience. We help new borrowers and investors apply, access financing options, and create a plan to protect their down payment. The lender requires proof of funds letters and a document showing the property details, but the process is designed to be easy and accessible for any kind of borrower. Information and recommendations are available from our team at every step of the loan process.
The 70% rule says you should pay no more than 70% of ARV minus renovation costs. On a property with a $300,000 ARV and $50,000 in rehab, the maximum purchase price is ($300,000 x 0.70) minus $50,000 = $160,000. Run these numbers through the hard money loan calculator alongside loan costs to confirm the deal makes sense. Following these rules helps investors avoid costly mistakes. Click below to get approved and request your rate.
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