The short answer
Last updated: July 2026
A hard money loan cost model should add origination points, fixed lender charges, interest on the average outstanding balance during the hold, and any exit fee. This calculator keeps those pieces separate, then reports total modeled financing cost and cost as a percentage of the loan. It is a scenario, not a lender quote.
After the estimate:
Put the result into a reviewed workflowShort-term financing cost
See where the financing dollars go.
Model points, simple interest on an average outstanding balance, fixed lender fees, and an exit fee. Verify the actual accrual and fee language in the loan documents.
Loan amount
$
Origination points
%
Fixed lender fees
$
Annual interest rate
%
Holding period
months
Average outstanding
%
Exit fee
$
Input-driven result
Your inputs
Formula
Result below
Modeled financing cost
$20,640
8.6% of entered loan amount
Average monthly interest
$1,680
On $168,000 modeled average balance
Points
$4,800
Modeled interest
$13,440
Fixed lender fees
$2,400
Exit fee
$0
Your calculation
$4,800 points + $13,440 modeled interest + $2,400 fees + $0 exit fee = $20,640
Estimate based on your inputs. Not a promise of results.
Define hard money loans
How it works
How this tool works.
Short-term real-estate financing is easy to misread when the term sheet mixes percentages, dollar fees, staged rehab draws, monthly interest, and exit conditions. Comparing only the note rate ignores points and charges; applying interest to the entire commitment can overstate cost when proceeds are drawn over time.
This worksheet uses your loan amount as the point basis and an average-outstanding percentage as a transparent shortcut for staged draws. It does not infer a draw schedule, extension charge, default rate, inspection fee, minimum interest period, or withheld reserve. Add those items to your underwriting from the actual documents.
1
Enter the committed loan amount, origination points, fixed lender fees, stated annual interest rate, expected holding months, average percentage outstanding, and known exit fee.
2
The tool converts points to dollars and applies simple modeled interest to the average outstanding balance for the entered holding period.
3
Review each cost component before using the total; excluded inspection, wire, legal, servicing, extension, or default charges can materially change the result.
4
Run a delayed-exit scenario and compare the output with the lender term sheet, payoff provisions, draw process, and your project cash-flow calendar.
Make the result useful
Underwrite the cost path, not just the advertised rate
Points and interest answer different questions. Points are modeled here on the entered loan amount at closing, even if some proceeds are drawn later. Interest is modeled on an average outstanding balance across the hold. Your agreement may instead charge on the commitment, an initial funded amount, daily balances, or a minimum balance, so the term sheet controls the real calculation.
The average-outstanding percentage is deliberately visible because draw timing changes both interest and liquidity. A lower average balance can reduce modeled interest, but it can also mean the borrower must advance rehab cash before reimbursement. Underwriting should therefore pair financing cost with a month-by-month sources-and-uses schedule.
Exit risk deserves its own scenario. A delayed sale or refinance adds interest and may trigger extension fees, while a lower appraisal can reduce replacement-loan proceeds. Run at least the expected hold and a delayed hold, then document the cash needed to reach each exit without relying on an uncommitted refinance.
The assumptions that move this result
Loan amount
The amount used as the point basis in this model; verify the contract basis if commitment and funded principal differ.
Origination points
Upfront percentage charge converted to dollars using the entered loan amount.
Average outstanding
The estimated share of the loan actually outstanding across the modeled hold, used only as a staged-draw shortcut.
Annual interest rate
The stated annual rate applied as simple interest in this scenario; it does not model default or extension pricing.
Holding months
Time from funding through the modeled exit; partial months and daily accrual conventions are not represented.
Fixed and exit fees
Known lender charges entered in dollars; third-party and conditional charges must be added separately.
Calculation lens
Points cost = loan amount x points percent. Modeled interest = loan amount x average outstanding percent x annual rate x holding months / 12. Total financing cost = points + modeled interest + fixed lender fees + exit fee.
The output is a transparent financing-cost scenario and component breakdown. It is not an APR disclosure, approval, payoff statement, lender quote, valuation, or recommendation to borrow.
Read the number in context
Rehab draws reduce the modeled average balance
A $240,000 commitment with 2 points, a 12% rate, eight months, $2,400 of fixed fees, and 70% average outstanding produces $13,440 of modeled interest before the other charges. The result should be reconciled to the actual draw and accrual language.
The exit takes four months longer
Keeping all other inputs constant and changing the hold from eight to twelve months exposes the extra modeled interest. Add any extension fee separately instead of burying it in the note rate.
The model uses simple interest and a single average outstanding balance. It excludes daily accrual conventions, compounding, minimum interest, extension and default terms, draw or inspection charges, unused-line fees, reserves, third-party closing costs, taxes, and project returns unless you explicitly include a known fee.
Before you act
• Confirm the amount on which points are charged.
• Map initial funding, borrower advances, draw timing, and reimbursement conditions.
• List every fixed, per-draw, conditional, extension, default, and exit charge.
• Run expected, delayed, and lower-value exit scenarios.
• Keep enough liquidity for work, interest, and a failed or delayed draw.
• Compare the model with the final term sheet and closing disclosure.
Keep the cost components inspectable
Do not replace points, interest, and fees with one unexplained percentage. Retain the term sheet version, assumptions, draw calendar, expected exit date, and delayed-exit rerun so another reviewer can reconstruct the decision.
Questions landlords ask
Questions about this tool and its limits.
Why does the calculator ask for average outstanding balance?
Some rehab loans release part of the commitment at closing and later amounts through draws. The average-outstanding input lets you approximate interest on the capital expected to be in use rather than silently assuming the full commitment is outstanding every day.
Are loan points the same as the interest rate?
No. One point is one percent of the amount used as the points basis and is generally a financing charge, while the note rate determines periodic interest. Confirm the actual basis, payment timing, and refundability in the lender documents.
Does the total include payoff or extension surprises?
Only an exit fee you enter is included. Minimum-interest clauses, extension fees, default interest, inspection charges, draw fees, legal costs, servicing fees, and withheld reserves require separate review because their triggers vary by agreement.
Can this calculator tell me whether a hard money loan is a good deal?
No. It organizes one financing-cost scenario. A complete decision also tests acquisition basis, rehab scope, contingency, draw liquidity, stabilized income, exit value, refinance eligibility, taxes, insurance, and the loss if the exit is delayed.
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Editorial ownership
Written and maintained by the Aptoria editorial team
Repository and source review completed July 29, 2026. Aptoria reviews scope, source fit, examples, limitations, links, and publication gates. This record does not claim attorney, CPA, lender, appraiser, or other independent professional sign-off.
Professional review is not claimed. Verify current law, tax treatment, loan terms, valuation inputs, and property-specific facts with the appropriate qualified professional before acting.
Primary and authoritative sources
CFPB: Loan Estimate explainer ↗
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