How Much Does a Hard Money Loan Cost?

Updated September 2026 Rates as of August 2026

A hard money loan typically costs 8.99%–13.5% interest-only plus 0–3 origination points and about 2%–4% in third-party closing costs on a short hold. On a $220,000 loan at 10.75% for 7 months with 1.5 points, expect roughly $16,000–$18,000 in finance and closing friction before sale costs.

Jaken Finance Group publishes 8.99%–13.5% on qualified fix-and-flip and bridge files. Points run 0–3 at close. See the full fee breakdown on fix and flip loan points and fees and model your deal on the fix and flip calculator.

Cost components

Component	Typical range	Notes
Interest (IO)	8.99%–13.5%	On full commitment including undrawn rehab holdback
Origination points	0–3	1 point = 1% of loan amount
Valuation	$450–$900+	Appraisal or BPO
Title / escrow	1%–2% of price	Varies by state
Draw inspections	$250–$400 each	4–6 draws on a gut rehab
Extension	Quoted per file	If you overrun the term

Worked example — $220K loan, 7-month hold

Line	Amount
Loan	$220,000 at 10.75% IO
Interest (7 mo)	≈ $13,800
1.5 points	$3,300
Valuation + title (example)	≈ $2,500
Total finance friction	≈ $19,600

Rate vs points — which term sheet is cheaper?

On short holds, points often matter more than a 0.5% rate difference. Compare two offers on the same $220,000 loan and 7-month hold:

Term sheet	Rate	Points	IO carry (7 mo)	Points $	All-in finance
Offer A	9.75%	2.5	~$12,600	$5,500	~$18,100
Offer B	11.25%	0.5	~$14,400	$1,100	~$15,500

Offer B wins despite the higher rate. Always model hold months — not annualized APR alone.

Minimum interest and extensions

Many bridge notes include 3–6 months minimum interest. If you sell in month four but minimum is six months, you pay two extra months of IO. Extensions add 0.5%–1% fee plus possible rate step — budget before you sign.

Scenario	Extra cost
3-month minimum, payoff month 2	1 month IO (~$1,970 on $220K at 10.75%)
6-month minimum, payoff month 4	2 months IO
One extension at 1% fee	$2,200 on $220K loan

Pre-close checklist — avoid surprise fees

1. Request written term sheet with rate, points, minimum interest, extension policy
2. Budget valuation + title + insurance outside the loan
3. Count draw inspections on gut rehabs (4–6 typical)
4. Model sale costs (8%–10%) separately from finance friction
5. Compare against fees schedule and fix and flip loan points and fees

Hard money from Jaken Finance Group runs 8.99%–13.5% IO with 0–3 points on qualified fix-and-flip and bridge files.

All-in cost vs profit margin — go/no-go table

Before you accept a term sheet, stress-test finance friction against net margin:

ARV	All-in cost	Gross spread	Finance friction (7 mo)	Net before sale costs
$285K	$220K	$65K	~$19,600	~$45K
$285K	$235K	$50K	~$19,600	~$30K
$285K	$250K	$35K	~$19,600	~$15K — thin

Sale costs (agent, title, transfer tax) often run 8%–10% of ARV — subtract separately. If net after hard money and sale costs falls below $20K, renegotiate purchase price or pass.

Related guides and calculators

• How much down payment for fix and flip
• Hard money points explained
• Is hard money worth it?
• Fix and flip calculator
• Interest rates overview — Jaken Finance Group publishes 8.99%–13.5% IO on qualified files

All-in carry worksheet — one flip, one number

Track every dollar, not just rate:

Cost line	$280K loan, 10.75% IO, 8 mo, 2 pts
Points (2%)	$5,600
Interest (8 mo IO)	~$18,200
Processing / legal	~$2,500
Draw inspections (6×)	~$1,800
Extension (if 1 mo)	~$2,500
Total lender friction	~$30,600

Add 8%–10% sale costs on ARV separately. If that total exceeds 35% of gross margin, renegotiate purchase. Points guide · worth it? · fees schedule

Jaken Finance Group publishes 8.99%–13.5% IO with 7–10 business day closes on qualified complete files.

Daily carry cost — why hold months dominate

Loan balance	Rate	Daily IO	Weekly IO
$200,000	10.75%	~$59	~$413
$280,000	11.50%	~$88	~$616
$350,000	12.25%	~$117	~$819

Every extra week on timeline costs $400–$800 on typical flip loans — a slow contractor is a finance cost.

APR vs IO rate — why APR misleads on flips

Hard money quotes interest-only annual rate, not 30-year amortizing APR:

Metric	10.75% IO, 7 mo, $220K	30-yr amort at 7%
Total interest	~$13,800	~$30,500 yr 1
Points	$3,300	0–1 pt
Hold	7 months	30 years

Comparing hard money APR to DSCR rate is apples-to-oranges — model total dollars for your hold months.

Wholesale assignment — hard money cost in the stack

Line	Amount
Contract price (A→B)	$185,000
Assignment fee	$15,000
Hard money on B-leg (90% LTC)	$166,500
Cash to close gap	~$33,500
IO (60-day hold until end buyer)	~$3,200
Points (2)	~$3,330
Total finance on assignment	~$6,530

Assignment deals need short hold — 60-day bridge at 8.99%–13.5% beats 6-month flip pricing.

Gut rehab vs cosmetic — cost difference in draws

Rehab level	Draw count	Inspection fees	IO pattern
Cosmetic (paint, floors)	2–3	$600–$1,200	Lower avg balance
Moderate (kitchen, bath)	4–6	$1,200–$2,400	Mid balance
Gut (down to studs)	6–10	$2,400–$4,000	High balance longer

Gut rehabs pay more total IO because balance stays high through month 4–5 — not because rate is higher.

State transfer tax on flip exit — separate from loan cost

State	Transfer tax on $300K sale	Who pays (custom)
Illinois	$1,500–$3,000+	Often seller — negotiate
Georgia	~$900 PT-61	Buyer
Texas	None	—
Florida	Doc stamps on deed	Usually seller

Transfer tax is not in the hard money term sheet — budget 1%–2% of ARV on sale side separately from 8.99%–13.5% IO carry.

Go/no-go cost threshold — one formula

Total finance friction (points + IO + fees + extensions) should stay under 25% of gross spread (ARV − all-in cost):

ARV	All-in	Gross spread	Max finance (25%)
$320K	$245K	$75K	$18,750
$285K	$230K	$55K	$13,750

Above 25%, renegotiate purchase or cut scope — the deal does not support 8.99%–13.5% carry.

Pre-qualify for a term sheet · (833) 264-7776