What hard money actually costs in 2026 — rates by deal type, what points really do to your numbers, and a full project costed line by line. Written by a brokerage that places these deals, not a lender selling one product.
Every hard money lender advertises an interest rate, and every borrower compares those rates. It is the wrong comparison. Once points, closing costs and the length of your hold are counted, the true cost of a hard money loan commonly runs 15% to 25% annualised — well above whatever rate appeared on the term sheet.
That is not a criticism of the product. It is what short-term asset-based money costs, and on the right deal it is worth every penny. But you cannot judge a deal on the rate alone, and the lenders who quote only a rate are relying on you doing exactly that.
Ranges differ by what you are borrowing against and how experienced you are. Broadly:
| Type of deal | 2026 rate | Notes |
|---|---|---|
| Residential fix and flip | 9%–12% | For experienced borrowers with a track record. First-timers price above this. |
| General residential hard money | 9.5%–15% | Wide range because the inputs vary so much. Heavy-renovation projects sit at the top of it. |
| Bridge financing | 10%–14% | Terms of twelve to thirty-six months. |
| Commercial | 9%–14% | Institutional commercial bridge at 70–75% LTV is the most competitive part of the market, around 9–11%. |
| Ground-up construction | 11%–15% | Highest rates, because completion risk sits on top of everything else. |
| Second position | 12%–14% | Behind an existing lien, so priced for the extra risk. |
For context, a conventional 30-year fixed sat near 6.75% in mid-2026. Hard money is materially more expensive by design — you are paying for speed and for a lender who will look at a property a bank will not.
Through our lending partners, fix-and-flip and bridge financing starts at 10.99% plus 1.99 origination points, up to 100% of cost and 70% of value, from $50,000, minimum credit 600, terms to twelve months. That sits inside the competitive band above rather than at the top of it, and the sharpest pricing is reserved for borrowers who have already paid off deals in good standing.
A point is 1% of the loan amount, charged up front at closing. Most hard money lenders charge one to four, with 1.5 to 3 being the industry standard. Commercial deals run one to five.
Here is the part worth understanding properly. On a short hold, points cost you more than the interest rate does — because you pay them once regardless of whether you own the property for four months or twelve, while interest stops accruing the day you exit.
Points are due in cash at closing and are generally not financed into the loan, so budget for them separately from the deposit. Two points on a $200,000 loan is $4,000. On $500,000 it is $10,000.
Numbers rather than ranges. This is a typical small flip financed on hard money.
| Purchase price | $150,000 |
| Loan at 70% LTV | $105,000 |
| Your deposit | $45,000 |
| Interest, 12% interest-only for 12 months | $12,600 |
| Origination, 2 points on $105,000 | $2,100 |
| Closing and title | $3,000 |
| Renovation budget | $40,000 |
| Total project cost | $202,700 |
| Cost of the money alone | $17,700 |
Monthly interest is $1,050 — $105,000 at 12%, divided by twelve. Exit in six months rather than twelve and you save $6,300 of interest but not a penny of the points.
That $17,700 is what the financing costs before you have made a single decision about paint or countertops. Which is why the resale number has to be honest, and why a four-month overrun is a far bigger problem than a slightly higher rate.
Seven things, and you control more of them than you might think.
Ask about every one of these before you sign anything. A lender who will not put them in writing on a term sheet is telling you something.
The Consumer Financial Protection Bureau's advice on this is worth taking: read the Loan Estimate and the Closing Disclosure line by line before signing, and question anything you do not recognise. Junk fees that appear at the last minute are the clearest signal you are dealing with the wrong lender.
Broadly 9% to 15% depending on the deal. Experienced borrowers on residential fix-and-flip land around 9% to 12%; construction and second-position lending run higher. Our lending partners start at 10.99%.
Once points, closing costs and your actual hold period are counted, all-in cost commonly runs 15% to 25% annualised. Comparing lenders on headline rate alone will mislead you.
Typically one to four, with 1.5 to 3 as the standard. One point is 1% of the loan, paid in cash at closing and usually not financed into the loan.
No. On a short hold, points cost more than rate, because you pay them once whatever happens while interest stops when you exit. Get quotes both ways and price them against your realistic timeline.
Most cap between 65% and 75% of as-is value, with 70% common. ARV-based lending can advance more against the finished value, typically still capping around 70% to 75% of ARV.
Borrow less against the deal, document your completed projects, bring a costed scope of work and a credible exit, and get more than one quote. Leverage and track record move pricing more than anything else.
Most lenders will extend for roughly one to two points plus continued interest. Plan for the possibility before you close rather than negotiating it when you are already late.
Some lenders charge them, some do not. Ask before closing, because a penalty for paying off early can undo the entire logic of a fast flip.
Answer these and we will tell you whether it is fundable, on what terms, and how fast it could close. Investment property only — we do not lend on a home you will live in.
We will run the numbers and come back to you. If it is time-sensitive, call 903-636-7511.
Dominion Hard Money arranges private and asset-based real estate financing for business purposes only. Not a commitment to lend. All loans subject to underwriting, property review, and approval. Terms vary by property, borrower experience, and exit strategy.