Investor · Hard Money · Fix & Flip and Bridge
Hard Money Loan Calculator
Quick answer: A hard money loan is usually capped at the lesser of two limits on the lender's term sheet: a percentage of your total cost (purchase price plus rehab) and a percentage of the after-repair value. Enter your term sheet's limits, points and interest rate to see your maximum loan, the cash you need at closing, what the loan costs over your hold, and the projected profit if you sell.
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Enter the interest rate and points from your term sheet to see payments, interest and profit. The loan-to-cost, loan-to-ARV and sale-cost figures are examples, not a quote; replace them and the other example numbers with your deal and your lender's terms.
The deal
Your term sheet
Loan-to-cost is a share of purchase price plus rehab. Loan-to-ARV is a share of the after-repair value. Your loan is capped by whichever is smaller.
Your plan
Sale costs: agent commissions, seller closing costs and transfer taxes, as a percent of the sale price (the ARV).
Your hard money loan
Estimates only — not a commitment to lend, a rate quote or a Loan Estimate. Jim Blackburn, NMLS #1072866.
How a Hard Money Loan Is Sized
Hard money lenders look at two numbers and lend against whichever is tighter. Loan-to-cost (LTC) is the loan as a percentage of what you put into the deal: purchase price plus rehab budget. Loan-to-ARV is the loan as a percentage of what the property should be worth after the work is done. The maximum loan is the smaller of the two results.
Example: $300,000 purchase + $60,000 rehab = $360,000 total cost. At a 90% LTC limit that's $324,000. On a $450,000 ARV with a 75% loan-to-ARV limit, that's $337,500. The maximum loan is $324,000, because loan-to-cost is the tighter limit here.
Where Your Cash Goes
- At closing. The part of the purchase price the loan doesn't cover, plus points and other closing costs. The calculator assumes the lender funds your financed rehab first and the rest of the loan goes toward the purchase, because rehab money is usually held back and released in draws as work is completed.
- During the rehab. Any rehab the lender doesn't finance, plus monthly payments while you hold the property. Taxes, insurance and utilities are extra and are not included here.
- At the sale. Sale costs and the loan payoff come out of the sale price. What's left over, minus everything you put in, is your profit.
What a Hard Money Loan Really Costs
The interest rate is only one piece. Points are charged up front no matter how quickly you sell, so on a short hold they can cost more than the interest. The calculator adds points, other closing costs and the interest for the months you expect to hold the property into one total cost of the loan. Change the hold period to see how a two- or three-month delay affects that total and your profit.
The 70% Rule Is a Screen, Not a Lender Rule
Many investors use the 70% rule as a quick way to screen deals: pay no more than 70% of the ARV minus the rehab budget. It's a rule of thumb, not something lenders require. A hard money lender sizes your loan from its own LTC and loan-to-ARV limits. The calculator shows the 70% figure next to your purchase price so you can see how much room the deal leaves, but the profit and cash-on-cash rows are the numbers that reflect your actual terms.
Flip or Bridge: Which Calculator to Use
This page focuses on the hard money loan itself: how big it can be, what it costs and how it affects the return on a short hold. To model a flip in more detail, including holding costs like taxes and insurance, use the Fix and Flip Profit Calculator. If you're buying your next home before selling the current one, the Bridge Loan Calculator fits that situation. If you plan to keep the property as a rental after the rehab, the BRRRR Calculator and DSCR Loan Calculator show the refinance side.
Frequently Asked Questions
What is a hard money loan?
A hard money loan is a short-term loan from a private or specialty lender, secured by the property itself. Underwriting leans on the deal: the purchase price, the rehab budget and the after-repair value (ARV). Investors use hard money loans for fix-and-flip projects and as bridge financing until they sell or refinance. Each lender sets its own leverage limits, points, interest rate and term, so the term sheet is the document to work from.
How is the maximum hard money loan amount calculated?
Most hard money loan term sheets set two caps: a maximum loan-to-cost (a percentage of purchase price plus rehab budget) and a maximum loan-to-ARV (a percentage of the after-repair value). The loan is limited by whichever cap produces the smaller dollar amount. This calculator figures both and shows which one sets your limit.
What are points on a hard money loan?
Points are an upfront lender fee. One point equals 1% of the loan amount, paid at closing. Some lenders charge points on the full hard money loan, including rehab funds held back for later draws; others charge them only on the amount funded at closing. This calculator applies points to the full loan amount so the estimate doesn't come in short. Check your term sheet.
Is a hard money loan interest-only?
Many hard money loans are interest-only, meaning the monthly payment is the loan balance times the interest rate divided by 12, and the full balance is due at the end of the term. Some are amortizing; for that option this calculator uses a 30-year amortization schedule with the remaining balance due at the end of the term. Some lenders also charge interest only on rehab funds after they are drawn. This calculator assumes the full loan is outstanding from day one, which overstates interest slightly if your lender charges on drawn funds only.
How much cash do I need at closing for a hard money loan?
Cash at closing is the part of the purchase price the hard money loan doesn't cover, plus points, plus your other closing costs. Any share of the rehab budget the lender doesn't finance comes out of your pocket during the project, and some lenders also ask for cash reserves. The calculator shows closing cash and total cash in the deal separately.
What is the 70% rule, and does a hard money loan require it?
The 70% rule is a common investor rule of thumb, not a lender requirement: pay no more than 70% of the after-repair value minus the rehab budget. A hard money loan is sized by the lender's own loan-to-cost and loan-to-ARV limits on your term sheet. The calculator shows the 70% figure only as a quick screen of the purchase price.
What happens if my project runs past the hard money loan term?
If you haven't sold or refinanced by the maturity date, you would need an extension from the lender, which usually carries its own fee, or a payoff from another source. Investors who plan to keep the property often refinance a hard money loan into a long-term rental loan such as a DSCR loan once the rehab is done. Set the hold period in the calculator longer than you expect to see how a delay changes your interest and profit.
Why doesn't this page show hard money loan rates?
Hard money loan pricing varies by lender, property, location, leverage and your experience as an investor, so a posted number rarely matches a real offer. Enter the interest rate from your own term sheet, and run each lender's terms through the calculator to compare total loan cost and projected profit side by side.
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Important Disclaimer
This calculator illustrates hard money loan math using only the numbers you enter. Loan-to-cost and loan-to-ARV limits, points, interest rates, terms, draw schedules and fees are set by each lender and vary from deal to deal; the starting values are examples, not quotes or typical terms. Results exclude property taxes, insurance, utilities, extension fees, draw or inspection fees and income taxes. The 70% rule is shown only as a common investor rule of thumb and is not a lender requirement. This is not a Loan Estimate, a rate quote, a loan approval or a commitment to lend. All borrowers and properties must qualify under lender guidelines. Jim Blackburn, NMLS #1072866. Equal Housing Opportunity.