Real Estate & Investing
Hard Money / Private Money Loan Calculator
Price a short-term hard money or private loan by combining interest-only payments with points and origination fees.
Calculation inputs
Enter the loan amount, pricing, and expected term in months.
Results
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Complete the fields and select Calculate to show results here.
About this calculator
This calculator totals the interest, points, and fees on a short-term hard money or private money loan, the kind commonly used to fund fix-and-flip or bridge financing. It is built for borrowers who want to see the full cost of a loan before signing, not just the advertised interest rate.
How the calculation works
- Monthly interest-only payment = (loan amount × annual rate) ÷ 12
- Points cost = loan amount × points %
- Total loan cost = (monthly payment × months) + points + origination fees
Notes and assumptions
Extensions usually carry additional points, so build a buffer into the expected term.
Many lenders charge a minimum interest period even if the loan pays off early.
How it works in plain English
Hard money loans are usually interest-only, meaning each monthly payment covers only the interest owed, with the entire principal due as a lump sum, or balloon payment, at the end of the term. The calculator finds that monthly payment by multiplying the loan amount by the annual rate and dividing by twelve.
On top of the monthly payments, most hard money loans charge points, an upfront fee expressed as a percentage of the loan amount, plus separate origination fees. Points are converted to a dollar figure and added to any origination fees to get total fees.
Adding total interest paid over the term to total fees gives the full cost of the loan. The calculator also expresses this as an effective annualized cost, which restates the total cost as if it applied over a full year, making it easier to compare a nine-month loan against a longer one or against other financing options.
The formula
- Monthly interest-only payment = (loan amount x annual rate) / 12
- Points cost = loan amount x points %
- Total cost of capital = (monthly payment x months) + points + origination fees
- Effective annualized cost = total cost / loan amount x (12 / months) x 100
Worked example
A $150,000 hard money loan at 11% annual interest with 2 points and a $1,500 origination fee is expected to run 9 months. The interest-only payment is $150,000 x 0.11 / 12 = $1,375 a month, totaling $12,375 in interest over the term.
Points cost $150,000 x 2% = $3,000, and adding the $1,500 origination fee brings total fees to $4,500. The full cost of the loan is $12,375 + $4,500 = $16,875, which works out to an effective annualized cost of about 15%, noticeably higher than the quoted 11% rate.
Frequently asked questions
Why is the effective annualized cost higher than the interest rate?
The interest rate only reflects the ongoing monthly cost, but points and origination fees are one-time charges paid regardless of the loan's length. Spreading those fixed fees over a short term, like nine months, makes their annualized impact larger than it would be on a longer loan.
What happens if I pay the loan off early?
Paying off early reduces total interest paid since you owe interest only while the balance is outstanding, but points and origination fees are already spent and don't shrink. Some lenders also charge a minimum interest period, so check your loan terms before assuming an early payoff saves the full expected interest.
What if I need to extend the loan past the original term?
Extensions typically require paying additional points or fees, which this calculator does not automatically add. Rerun the numbers with the new term and any extension fees included to see the updated total cost, since a longer holding period spread across the same fixed fees usually lowers the effective annualized cost even as the total dollars paid increase.
Is the entire principal really due at the end?
Yes, in a typical interest-only hard money structure the borrower pays only interest each month and then repays the full original loan amount in one balloon payment at maturity, often through a sale or refinance. This calculator assumes that structure.
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