Rates shift with your loan-to-value, borrower track record, and property type, but the headline number only tells part of the story. Origination points, typically 1.5 to 3 points, and short-term fees can add several percentage points of effective cost to a six-month hold, which is why comparing two quotes by rate alone almost always leads to the wrong decision.
TL;DR:
- Hard money loan rates generally range from 9.5% to 13%, with lower rates reserved for borrowers with strong credit, repeat history, and favorable LTV ratios.
- Total borrowing costs are heavily influenced by origination points, fees, and structure, often outweighing the headline interest rate, especially on short-term flips.
- States with high lender competition, like California, Florida, and Texas, tend to offer the lowest advertised rates, while rural markets see higher costs due to fewer lenders.
- Negotiating speed and certainty can be improved by providing detailed deal documentation upfront and choosing lenders with in-house funding capable of rapid closings.
- When comparing quotes, calculating the effective cost, including points and fees over your actual hold period, is crucial to identify the most economical financing option.
Fix-and-flip loans, bridge loans, ground-up construction, and rental DSCR loans each carry their own pricing bands, and lumping them together is where a lot of investors get their expectations wrong.
First-position loans typically price between 9.5% and 13%, with the best terms going to borrowers with strong credit and repeat experience.
| Loan type | Typical rate range | Origination points | Common term |
|---|---|---|---|
| Fix-and-flip | 9%–13% | 1.5–3 points | 6–12 months |
| Bridge loan | 9%–12% | 1.5–3 points | 6–12 months |
| Ground-up construction | 10%–13% | 2–4 points | 9–12 months |
| Rental / DSCR | 9%–13% | 1–3 points | 30-year amortization, short lockout |
That spread over conventional 30-year mortgage benchmarks has narrowed slightly compared with 2024 peaks, but the gap still sits around 4 to 5 percentage points versus a typical conventional rate. First-time borrowers or those requesting near-maximum leverage should expect to land in the upper third of their loan type’s range, not the middle. For flip-specific numbers and case examples, our fix-and-flip rate breakdown digs deeper into what different deal profiles actually pay.
Seven variables do almost all the work in determining where your quote lands inside the ranges above. Understanding which ones you can influence, and which you cannot, is the difference between accepting a quote and negotiating one.
Pro Tip: Before you shop rates, pull your last three closed deals into a one-page summary showing purchase price, ARV, and exit timeline. Lenders price faster, and often better, when they can see a track record instead of guessing at one.
The rate you’re quoted is never the full cost of borrowing. Origination points, exit fees, inspection or draw fees, and prepayment interest minimums all stack on top of the interest rate, and on a short hold, those upfront costs often matter more than a fraction of a point on the rate itself.
Here’s how to work out the real number:
| Cost item | Typical range |
|---|---|
| Origination points | 1.5–3 points |
| Exit or payoff fee | 0–1 point |
| Inspection/draw fee (per draw) | $150–$500 |
| Prepayment interest minimum | 1–3 months guaranteed |
Points cost $6,000 upfront. Our guide on hard money fee structures breaks down where these line items commonly hide in a term sheet.
They vary substantially, and the pattern tracks lender density more than it tracks regional cost of living. States with heavy lender competition, notably California, Florida, and Texas, consistently produce the lowest advertised rates for qualified borrowers because multiple lenders are bidding for the same deal flow.
Always validate a quote against at least two other lenders active in your specific county, not just your state, since urban and rural pricing inside the same state can differ by two or more percentage points.
Pricing on a hard money loan is rarely fixed the way a bank rate sheet is. Packaging your deal well, and bringing the right documentation upfront, routinely shaves points or a percentage point off an initial quote.
Once your file is complete, negotiate directly: offer more borrower equity to lower your LTV, tighten your exit timeline if you can back it up, or ask for point discounts explicitly tied to repeat business. Our breakdown of how to evaluate lender terms covers what else belongs in that conversation beyond price.
Pro Tip: A direct lender that funds its own loans, rather than brokering to a third party, can often move faster on complex or high-value deals because there’s no second approval layer. That speed matters most when you’re competing for a property with a tight closing window.
Say you’re financing a $250,000 flip loan and you have two offers on the table. Which one actually costs less depends entirely on how long you hold the money.
The takeaway: a lower-point, higher-rate loan almost always wins on a fast flip, while a higher-point, lower-rate loan only pays off if you expect to hold well past your original exit plan. Plug your own loan amount, rate, and points into this same three-step math before signing anything, since the assumptions above (interest-only, no prepayment penalty) don’t apply to every term sheet.
Rate benchmarks only tell you what the market is doing in aggregate. What they can’t tell you is whether a specific lender can actually close on your timeline, which is often the more expensive variable when a deal falls through.
Some direct lenders are backed by family offices, enabling in-house funding decisions without broker or warehouse approvals. This structure can support closings in as little as a few days on qualifying deals, and some lenders have closed over $1 billion in loans with strong track records. Certain lenders also finance projects that many others won’t touch, including ultra-luxury single-family homes above $10 million, where standard rate-sheet pricing rarely applies.
None of that replaces the need to compare written quotes. Always confirm the exact rate, points, and fees in writing before you commit, and weigh them against the effective-cost math covered above rather than the headline number alone.
The conventional advice on hard money rates treats the interest rate as the number that matters most. It isn’t. On a typical six-to-nine-month flip, points and fees usually move your effective cost more than a full percentage point on the rate does, and most rate comparison guides skip that math entirely.
The bigger gap I see is in how borrowers prepare. Investors who show up with a documented track record and a firm contractor bid consistently get better terms than those who show up with a plan and an estimate, regardless of credit score. That’s not a loophole. It’s underwriting logic: lenders are pricing certainty, not just risk.
If you take one thing from the numbers here, take this: run the effective-cost calculation on every quote before you compare rates side by side. A loan with a slightly higher headline rate and lower points often beats the “cheaper” offer on any hold period under a year. Rate shopping without that math is shopping blind.
— Daly Kay DiNatale
Some direct lenders close hard money loans in days, not weeks, by making funding decisions in-house rather than through layers of broker approval. That speed matters most when you’re comparing quotes against a tight closing deadline and can’t afford a lender that stalls at underwriting.
If you’re ready to see where your deal lands against the benchmarks covered above, start with Capital Funding’s hard money loan program for a written quote based on your actual numbers, not a rate-sheet average. Flip-specific borrowers can also review the fix-and-flip program directly. To move quickly, have three items ready before you apply: your signed purchase contract, a contractor bid for any renovation scope, and proof of funds or a portfolio summary of past deals. Borrowers who bring that package upfront routinely get pricing decisions back within a day or two instead of waiting on back-and-forth document requests.
This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.
Add any monthly draw or servicing fees on top of that base interest figure.
Lenders often size their loan-to-ARV limits around this same benchmark when evaluating fix-and-flip deals.
Compensation varies by lender and role, but loan officers or brokers commonly earn a percentage of the origination points charged on a deal, which on a $500,000 loan at 2 points would represent $10,000 in fees split between the parties involved. Direct lenders like Capital Funding often price with fewer intermediary layers, which can reduce the total point spread charged to the borrower.
Points are typically non-refundable once a loan closes, though some lenders will credit unused underwriting fees if a deal never funds. Always confirm refund terms in writing before paying any upfront deposit.
