How the hard money loan calculator models interest
The model uses simple interest on the full loan amount for the entire entered term: principal multiplied by annual rate multiplied by months divided by twelve. Monthly interest is the same principal multiplied by the annual rate and divided by twelve.
This structure matches an interest-only scenario with no principal reduction during the term. If a loan uses staged draws, partial releases, amortization, compounding, or a changing balance, calculate those cash flows from the actual loan documents instead of treating this estimate as a payoff statement.
Separate lender points from fixed fees
Points are calculated as a percentage of the entered principal. One point means one percentage point of the loan amount. Fixed fees are entered as a dollar amount so they can represent charges that do not scale with principal.
Total financing cost adds term interest, points, and fixed fees. The maturity result shows principal only because this scenario assumes each monthly interest amount is paid when due; points and fees also remain separate. If the agreement accrues interest instead, add unpaid accrued interest to the lender’s actual payoff statement.
Match the loan term to the project timeline
Use the expected number of months from funding through repayment, including construction, lease-up, marketing, closing, and a timing case you want to test. A delay affects interest even when the loan amount and annual rate do not change.
Compare at least the planned payoff month with a longer hold by changing only the term. Then move the resulting financing cost into the related flip or BRRRR analysis so property profit and borrowing cost remain part of the same timeline.
Loan cost is not the same as project return
This page measures borrowing cost and payoff, not the economics of the property. A lower cash contribution can change cash-based return while points and interest reduce project profit, so both the financing result and the complete project budget are needed.
The calculator does not apply a lender maximum based on purchase price, cost, ARV, collateral, experience, or exit plan. Enter quoted terms for comparison and verify underwriting requirements directly with the lender.
Review charges that sit outside the simple model
Loan documents may address appraisal, legal work, title, inspections, draws, unused-line charges, servicing, extension, default, and prepayment. Add applicable fixed charges to the fee input only when doing so matches their timing and avoids duplication elsewhere.
The result is a planning estimate rather than a loan offer, closing disclosure, or legal interpretation. Confirm principal, interest method, point base, payment dates, maturity, payoff conditions, and every fee before funding.
Hard Money Loan Calculator FAQ
How is hard money interest calculated here?
Interest equals loan amount multiplied by the annual rate and by months divided by twelve. The calculation assumes the full balance remains outstanding and does not compound.
What is one point on a hard money loan?
One point is 1% of the entered loan amount. Points cost equals principal multiplied by the points percentage.
Are hard money payments interest-only in this calculator?
Yes. Monthly interest is shown without scheduled principal amortization, and the principal remains due at maturity. Use the investment mortgage or commercial loan calculator for an amortizing payment scenario.
Why does the maturity amount show principal only?
The model assumes scheduled monthly interest is paid when due, so the original principal remains at maturity. Unpaid interest, points, fees, extensions, and other charges can change an actual lender payoff statement.
Does EstateCalc provide current hard money rates?
No. Interest rate, points, term, and fees are user inputs. Enter terms from the financing scenario you want to compare; defaults are not market quotes.
Continue the property analysis
Compare this result with adjacent metrics, keeping each formula’s income, expense, and financing scope consistent.