Home / Hard money loan rates
Hard money loan rates: what flippers really pay
Hard money costs more than a bank loan. Here are typical rates and points, what changes them and how to work out your cost on a flip.
Get my termsHouston hard money lenderTypical hard money loan rates
Short answer: hard money loans for fix and flip investors typically carry interest rates of about 10% to 13%, usually interest-only, plus 1 to 3 points (1% to 3% of the loan) at closing. Your rate depends on the deal, your experience, your credit and how much of the purchase and rehab the lender funds. These are typical market ranges; your exact terms are quoted after you send the deal.
See your terms in seconds
Your loan amount shows as you type. Send the deal and a loan officer follows up.
Estimate only. Loan amount is the lower of 100% of purchase plus rehab or 70% of the sale price when finished (after-repair value). Minimum loan $150,000. Business-purpose loans on investment property.
What moves a hard money rate
- Leverage: funding 100% of purchase and rehab is priced differently from 80%
- The deal: a wide gap between total cost and ARV lowers risk
- Experience: flips completed and sold
- Credit: higher scores often get better pricing
- Loan size and term
How to work out your cost
Monthly interest-only payment = loan amount x rate / 12. Points are paid once, at closing.
| Example at 12% and 2 points | Amount |
|---|---|
| Loan amount | $240,000 |
| Points (2%) | $4,800 |
| Monthly interest at full balance | $2,400 |
| 6 months of interest | $14,400 |
| Total loan cost over 6 months | $19,200 |
The example uses a 12% rate and 2 points only to show the math.
Rate vs leverage: what matters more on a flip
A lower rate that needs 20% down ties up cash you could use on the next deal. On a $240,000 flip, 20% down is $48,000. With 100% of purchase and rehab funded, your cash stays free. Compare the full cost, not just the rate. See 100% fix and flip financing.
Fees to ask about
- Points
- Processing or underwriting fee
- Draw or inspection fees on the rehab
- Extension fees if the flip takes longer
- Prepayment terms
Questions investors ask
Straight answers about hard money loan rates.
What are hard money loan rates?
Typically about 10% to 13% interest plus 1 to 3 points for fix and flip loans. Your exact terms depend on the deal, experience and credit.
Are hard money loans interest-only?
Usually yes. You pay interest monthly and repay the balance when you sell or refinance.
What are points on a hard money loan?
An upfront fee, where one point equals 1% of the loan amount, paid at closing.
Why are hard money rates higher than bank rates?
The loans are short-term, close fast and fund houses banks will not, so the lender takes more risk.
How do I get your rate?
Send the deal using the form on this page. A loan officer follows up with your terms.
More from Houston Private Money
Loans, calculators and guides for Houston fix and flip investors.