Hard Money Calculator
How the calculator works
The annualized true cost of capital is total cost (interest + points + junk fees) divided by loan amount × hold years. That ratio is the apples-to-apples comparison number between hard money, DSCR, construction loan, and conventional financing — and the one institutional underwriters use, not the marketed rate.
Minimum-interest provisions are the single most-missed variable. Most hard money loans include a contractual floor of 3 or 6 months of interest regardless of when you pay off. The calculator handles this by billing interest on max(actual hold, minimum months) — the same way the lender's payoff statement will compute it.
For the full hard money definition see hard money in the glossary and points.
Frequently asked questions
What does hard money cost in 2026?
Typical marketed rates run 9–13% interest-only with 1–3 origination points plus $1,500–4,000 in junk fees. On a 6-month hold with a 6-month minimum-interest provision, the annualized true cost lands around 13–17% — materially higher than the marketed rate. Best-tier operators (5+ closed deals with the lender, 25%+ equity, conservative ARV) negotiate down 100–200 basis points.
Why is my true cost higher than the marketed rate?
Three things drive the gap: (1) origination points are a fixed cost paid up front, so they amortize across whatever hold period you actually have — short holds make them hurt more; (2) junk fees stack at close and aren't reflected in the marketed rate; (3) minimum-interest provisions guarantee the lender N months of interest regardless of when you pay off, so a fast flip still pays the full minimum.
What is a minimum interest clause?
Many hard money loans include a 'minimum interest' clause that guarantees the lender N months of interest regardless of when you pay off — common values are 3 months or 6 months. So a $400k loan at 10.5% paid off at month 4 with a 6-month minimum still owes 6 months of interest ($21,000) instead of the 4 months actually used ($14,000). Always read the prepayment clause before signing.
How does hard money compare to DSCR?
Hard money is acquisition + rehab financing — 6–18 month interest-only on distressed property. DSCR is takeout financing — 30-year amortizing on stabilized rental. The right move on a BRRRR is hard money for 4–9 months, then DSCR refinance once the property is stabilized. See the full comparison.
Are there cheaper alternatives to hard money?
Yes, if the timeline and property condition allow: conventional financing on habitable properties (rates 50–150bps lower but 30–45 day close); private money from individual lenders (often 100–200bps cheaper than institutional hard money); seller financing where the seller owns free and clear and is motivated to defer cap gains. Each has its own constraints; hard money remains dominant for distressed acquisitions that need a 14-day close.
What does 'loan-to-cost (LTC)' mean in hard money?
LTC is the loan amount as a percentage of total project cost (purchase + rehab). Most hard money lenders cap at 80–90% LTC, meaning the borrower must put 10–20% of total cost in cash as the equity layer. This is different from LTV (loan-to-value), which is the loan as a percentage of ARV — typically capped at 65–75% LTV.
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