Ridge Street Capital built this hard money loan calculator to help real estate investors model the full cost of a fix-and-flip loan before committing to a deal. Enter your purchase price, rehab budget, after-repair value (ARV), loan term, and rate below to calculate your monthly interest payment, total cost of capital, loan-to-ARV threshold check, and break-even sale price.

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How to Use the Hard Money Loan Calculator

This calculator estimates your monthly payment, full cost of borrowing, and whether your deal meets the 70% loan-to-ARV threshold that most hard money lenders use as an underwriting ceiling.

Step 1: Enter your deal numbers

Start with purchase price, rehab budget, and after-repair value (ARV). The ARV is the most important input: it drives both the LTARV check and the break-even calculation. Use a conservative estimate based on closed comps, not list prices.

Step 2: Set your loan-to-cost (LTC)

LTC is the percentage of the total project cost (purchase plus rehab) that the lender will cover. Ridge Street Capital lends up to 90% of the purchase price and 100% of the rehab costs. If you are unsure, leave the default at 85% for a conservative baseline.

Step 3: Set rate and term

The interest rate defaults to 11%. The specific rate depends on credit score, LTV requested, borrower track record, and deal location. Select the loan term that matches your projected project timeline, including time on market to close a sale. Hard money loans are interest-only, so every additional month adds directly to your cost of capital.

Step 4: Enter loan costs and monthly holding costs

An origination fee is a lender charge used to cover the costs of underwriting, processing, and funding the loan. The calculator uses a default origination fee of 1.5%, although actual fees vary by lender, borrower profile, and loan program. 

Step 5: Enter monthly holding costs

Holding costs are the property-level expenses that accrue each month the project is active: property taxes, vacant property insurance, and utilities. These costs are separate from loan interest but accrue in the same way. Every month a project runs beyond schedule increases both interest expense and holding costs, reducing overall profit. 

Step 6: Read the results

The monthly IO payment is your recurring cash obligation while the project is active. The balloon payment is the full loan balance due at the end of the term. Plan your exit timeline around it.

The Effective APR is the most useful number for comparing lenders. It annualizes the true cost of the loan, including the origination fee, so a loan with a lower rate but higher points may be more expensive than it appears.

The Loan-to-ARV row shows how your projected loan amount compares to the property's after-repair value. At Ridge Street Capital, maximum LTARV typically ranges from 70% to 75%, depending on investor experience, credit score, and project complexity. If your LTARV exceeds program limits, the deal structure may need to be adjusted before it qualifies for financing.

The Break-even Sale Price is the minimum exit price to recover all costs. Compare it to your ARV to confirm you have an adequate margin before committing to the deal.

How Hard Money Loan Payments Are Calculated

The Interest-Only Payment Formula

Monthly IO payment = (loan amount × annual interest rate) ÷ 12

On a $300,000 loan at 11% annually: $300,000 × 0.11 = $33,000 annual interest $33,000 ÷ 12 = $2,750 per month

That payment stays flat for every month the loan is outstanding. No portion of it reduces the principal balance.

The Balloon Payment

At loan maturity, the borrower owes the full original principal in a single payment. On the $300,000 loan above, the balloon is $300,000 regardless of how many monthly payments have been made. Lenders underwrite primarily to confirm that the exit strategy is realistic. Whether the plan is to sell the property or refinance a hard money loan into long-term financing, the lender's focus is on how the balloon payment will ultimately be repaid, not on the monthly payment history alone.

How Hold Time Affects Total Cost

Hold time is the variable most investors underestimate when running deal analysis. Every additional month adds one monthly IO payment plus one month of holding costs. On a delayed project, those two figures compound quickly.

The table below models a $300,000 loan at 11% with $600 per month in holding costs.

A project modeled at 6 months that runs to 12 months costs $20,100 more than planned. On a deal with a projected profit of $50,000, that overrun eliminates a significant portion of the margin. Investors who build a three-month cushion into the initial loan term may pay slightly more interest, but they often avoid the cost and uncertainty of a loan extension, which typically carries additional fees.

Apply for a Hard Money Loan

Investors with a deal ready to evaluate submit their project through Ridge Street's Quick Application. After submission, a loan officer reviews the property details, runs the underwriting numbers, and issues a term sheet within 2 business hours.

For investors who want to model the full deal pro forma, including ARV, rehab budget, holding costs, and projected net profit, Ridge Street's Fix and Flip Calculator runs the complete analysis.

Hard Money Loan Calculator Frequently Asked Questions

How do you calculate a hard money loan payment?

Multiply the loan amount by the annual interest rate and divide by 12. A $250,000 loan at 11% annually produces a monthly payment of $2,292. Because hard money loans are interest-only, the payment stays flat for the life of the loan. The full principal balance comes due at maturity as a balloon payment.

What is the Effective APR on a hard money loan, and why does it matter?

Effective APR annualizes the true cost of the loan, including origination fees, not just the stated interest rate. A loan at 10.5% with 2.5 origination points can carry a higher Effective APR than a loan at 11% with 1 point, depending on hold time. Comparing lenders on stated rate alone understates the cost of high-point offers. Effective APR produces a consistent comparison across term sheets.

What is the 70% rule for hard money loans?

The 70% rule is a deal-analysis guideline: an investor should not pay more than 70% of a property's ARV minus renovation costs. Separately, most hard money lenders enforce a 70–75% LTARV ceiling on the loan amount itself. Both rules reflect the same principle: the post-renovation value of the property must provide enough margin above the loan balance to absorb selling costs, rehab overruns, and market risk. If the calculator's Loan-to-ARV check returns "Fails," the deal structure exceeds that ceiling and requires adjustment before it will qualify for funding.

What is a balloon payment on a hard money loan?

A balloon payment is the full original loan balance due in a lump sum at the end of the loan term. Because interest-only payments do not reduce the principal, the balloon equals the original loan amount regardless of how many monthly payments have been made. Investors retire the balloon through a property sale or by refinancing into long-term financing. For investors holding a completed renovation as a rental, Ridge Street's DSCR Loan Program handles that transition.

What is the difference between LTV and LTC?

LTV (loan-to-value) divides the loan amount by the property's current appraised value. LTC (loan-to-cost) divides the loan amount by the total project cost, including purchase price plus rehab budget. LTC is the primary sizing metric for fix-and-flip deals because it accounts for renovation spending, not just the acquisition. Most lenders apply both ratios and lend to the lower of the two.

How is a hard money loan different from a conventional mortgage?

Conventional mortgages amortize over 15 or 30 years: every payment includes a principal reduction, and the outstanding balance decreases each month. Hard money loans are interest-only for a fixed short term, with full principal due at exit. Monthly payments on the same principal are lower with hard money because no principal is being repaid, but the total cost is higher because rates run well above conventional levels. In practice, the two structures serve different deal types. 

Banks do not fund properties requiring substantial structural or systems repair. Hard money lenders do, which is why most fix-and-flip acquisitions have no conventional alternative. For a full breakdown of how hard money loan pricing works across LTV tiers and borrower profiles, see the Fix and Flip Loans Guide.

Can I pay off a hard money loan early?

Most hard money lenders permit early payoff. Some require a minimum interest period of 3–6 months. Ridge Street Capital's fix-and-flip loans carry no prepayment penalty. An investor who closes the project and sells in month 5 of a 12-month term pays interest for 5 months only.

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