Hard Money Loan Calculator
What hard money actually costs a flipper: interest-only payments, origination points, total cost of capital over the hold, and the effective annualized rate — including the minimum-interest guarantee. Free planning estimate, no sign-up.
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Quick Answer
Hard Money Loan Calculator estimates monthly interest-only payment of $2,500 and total interest over hold of $15,000 for this scenario.
Key Takeaways
- Hard Money Loan Calculator estimates monthly interest-only payment of $2,500 and total interest over hold of $15,000 for this scenario.
- This is the gotcha most first-time hard money borrowers never see coming: the minimum-interest guarantee. You borrowed $250,000 at 12% with 2 points and paid it off in 4 months — ahead of schedule, by any honest measure. But the note guarantees the lender 6 months of interest whether you hold that long or not, so you are billed for 6 months: $15,000 of interest, not the $10,000 a 4-month hold would suggest. The guarantee costs you $5,000 for months you did not even borrow the money.
- Not under a minimum-interest guarantee. This $250,000 loan was paid off in 4 months but billed for 6 months of interest — $15,000 instead of $10,000 — costing $5,000 for months the money was not outstanding.
Calculation Output
Monthly Interest-Only Payment
$2,500
Total Interest Over Hold
$15,000
Origination Points / Fees
$5,000
Total Cost of Capital
$20,000
Effective Annualized Cost
24.0%
All-In Monthly Carrying Cost
$5,000
Result Chart
Monthly Interest-Only Payment
$2,500
Total Interest Over Hold
$15,000
Origination Points / Fees
$5,000
Total Cost of Capital
$20,000
Effective Annualized Cost
24.0%
Key Facts
| Monthly Interest-Only Payment | $2,500 |
|---|---|
| Total Interest Over Hold | $15,000 |
| Origination Points / Fees | $5,000 |
| Total Cost of Capital | $20,000 |
| Effective Annualized Cost | 24.0% |
| All-In Monthly Carrying Cost | $5,000 |
How This Estimate Works
- This is the gotcha most first-time hard money borrowers never see coming: the minimum-interest guarantee. You borrowed $250,000 at 12% with 2 points and paid it off in 4 months — ahead of schedule, by any honest measure. But the note guarantees the lender 6 months of interest whether you hold that long or not, so you are billed for 6 months: $15,000 of interest, not the $10,000 a 4-month hold would suggest. The guarantee costs you $5,000 for months you did not even borrow the money.
- Add the $5,000 in points and the total cost of capital is $20,000 — on a loan you held for just 4 months. Annualized over the actual hold, that is 24.0%: the quoted 12% rate plus points plus two phantom months of interest, compressed into a four-month window. This is the most expensive way to use hard money, and it is entirely avoidable: it lives in the note's fine print, not in the rate sheet, which is why the guarantee is an input on this calculator rather than a footnote.
- The practical lesson is not "never take a loan with a minimum" — guarantees of 3–6 months are common, and the lender offering one may still be the best overall deal. The lesson is to price the exit you actually expect, not the exit you hope for. If your realistic exit is month 4, a note with a 6-month minimum should be underwritten as a 6-month loan, full stop — and compared against a no-minimum note at a slightly higher rate, which may be cheaper on your actual timeline even though its rate sheet looks worse.
- This profile also sharpens the flip-versus-hold decision. If the property sells in month 4, the guarantee is a sunk cost of the sale. If it stabilizes and you refinance instead — the BRRRR exit — the guarantee still applies at payoff, so the refinance has to absorb it either way; run that leg in the BRRRR calculator with the payoff figure from this page, not the hoped-for one. And if a lender will not disclose whether a minimum exists, treat that as the answer: assume one does.
- All-in, this loan costs $5,000 a month spread over the actual 4-month hold — the number to budget, including the phantom months. This is an educational planning estimate, not lending advice and not a lender recommendation. Actual terms vary by lender, property, experience, and market; figures exclude extension fees, draw and inspection fees, appraisal, legal, and closing costs beyond origination points unless noted. No lead-gen form lives on this page, and no lender is endorsed here.
FAQ
If I pay off a hard money loan early, do I save the remaining interest?
Not under a minimum-interest guarantee. This $250,000 loan was paid off in 4 months but billed for 6 months of interest — $15,000 instead of $10,000 — costing $5,000 for months the money was not outstanding.
How common are minimum-interest guarantees?
Common enough to check for on every quote: 3–6 month minimums appear regularly in hard money notes. They are not a reason to reject a lender outright, but the loan must be underwritten on the guaranteed months, not the hoped-for exit month.
What are typical hard money terms in 2026?
Roughly 9–13% annual rate, 1–3 origination points, 65–75% loan-to-value (or of after-repair value), 6–24 month terms, interest-only payments, and funding in days rather than weeks. Terms vary by lender, property, and borrower experience.
Why is the effective annualized cost higher than the quoted rate?
Because points are paid up front and never amortized: on a short hold, a 2-point fee is a large share of the loan compressed into a few months. Annualizing over the actual hold — not the note term — is the only honest comparison between two hard money quotes.
Is this calculator a lender recommendation or a loan offer?
Neither. It is an educational planning estimate with no lender endorsements and no lead-gen form. Actual terms depend on the lender, the property, and your track record; confirm any quote in writing before relying on it.
What is this $250K hard money estimate not telling me?
It excludes extension fees, draw and inspection fees, appraisal, legal, and closing costs beyond origination points, and it cannot see your lender's fine print — minimum-interest guarantees, prepayment terms, and extension pricing all change the real number. Read the note, not just the rate sheet.