Hard Money Loan Rates and Fees: What Lenders Charge (2026 Guide)

Hard money pricing comes in several pieces, and comparing offers on the interest rate alone is the fastest way to pick the wrong one. This guide breaks down every part of the cost — rate, points, fees, and monthly carry — with the ranges you'll see in the market, so you can compare quotes side by side.

New to the topic? Start with What Is a Hard Money Loan? or read How to Get a Hard Money Loan.

Interest Rates: The Range You'll See

Hard money interest rates are quoted annually and are commonly in the high single digits to mid-teens — well above conventional mortgage rates. Where a specific deal lands within that range depends on leverage, property type, experience, and term, as explained below.

Lower end of the range: conservative loan-to-value, experienced borrowers, a strong exit, stabilized properties
Higher end of the range: higher leverage, distressed or unusual properties, first-time borrowers, longer timelines

Most hard money loans are interest-only, so the monthly payment covers the interest charge on the balance rather than amortized principal and interest. The principal is repaid at sale, refinance, or maturity.

An Illustrative Example

To show how the pieces add up, here's a hypothetical structure on a $500,000 loan. The numbers are examples for arithmetic only — actual pricing always depends on the deal:

Interest-only payment at 10%: roughly $4,167 per month ($50,000 per year)
2 points at closing: $10,000, usually deducted from loan proceeds
Appraisal, title, and escrow: typically several thousand dollars depending on the deal

On a 9-month hold, that hypothetical loan costs about $37,500 in interest plus the points and third-party fees. Run the same math on every offer you receive — a lower rate with higher points isn't always the cheaper loan.

Origination Points

Points are an upfront fee calculated as a percentage of the loan amount. The market norm is commonly 1–3 points, and smaller loans often carry more points because the lender's fixed costs are spread over less principal. Ask whether points are deducted from proceeds or paid in cash at closing — either way, they're part of the total cost.

Other Fees to Ask About

Appraisal or valuation: a full appraisal, BPO, or ARV appraisal, ordered at the borrower's cost
Underwriting or due diligence fees: charged by some lenders before closing
Title, escrow, and recording: standard closing costs, sometimes shared with the seller per the purchase contract
Draw fees: on rehab loans, an inspection fee per construction draw is common
Extension fees: charged if the loan needs more time than the original term
Late fees: spelled out in the loan documents — know them before you sign

What Drives Your Rate

Leverage. The more of the property's value the lender funds, the higher the rate tends to be.
Property condition. Stabilized and rentable properties price better than distressed or vacant ones.
Borrower experience. A documented track record improves pricing.
The exit. A clear, realistic repayment plan within the term is the biggest factor in whether a lender offers strong terms at all.
Market conditions. Rates move with the broader market and with each lender's available capital.

How to Compare Offers

Add up rate, points, and fees over your expected hold period — that's the real cost
Ask whether the rate is fixed or floating
Read the fee schedule line by line: minimum interest, draw fees, extension fees, payoff terms
Get every number in writing before you commit. A lender who won't put the full cost in writing isn't worth your deal.

When the Higher Cost Is Worth It — and When It Isn't

Hard money pricing makes sense when the deal's margin clearly covers the cost of capital and speed is worth real money — winning a property against competing offers, closing before a bank could, or funding a rehab that banks won't touch in the property's current condition.

It doesn't make sense when margins are thin, the timeline isn't actually urgent, or you'd qualify for a DSCR loan or conventional financing today and simply haven't explored it. Long-term holds on hard money are almost always the wrong structure.

The Bottom Line

Hard money costs more than bank debt — that's the price of speed, flexibility, and underwriting on the property instead of your paperwork. Investors who use it well treat pricing as one input in the deal math, not the deal itself. Our team reviews every request on the property, the numbers, and the exit before any terms are discussed.

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Next: Hard Money Loans With Bad Credit: What Actually Matters

CA Business Capital is a California-based lending advisory service connecting real estate investors and business owners with lenders across the country. Contact: info@cabizfunding.com | 559-549-4717

Hard Money Loan Rates and Fees: What Lenders Charge