How hard money loans work
Hard money loans are short-term loans secured on property and based mainly on the property's value rather than the borrower's income. They're often interest-only, with the loan repaid at the end from a sale or refinance. In the UK, similar lending is usually called bridging finance.
Rates are higher than on standard mortgages, and lenders usually charge arrangement and exit fees too, which this calculator doesn't include.
Worked example
Borrowing £300,000 at 10% a year interest-only for 12 months costs £2,500.00 a month, £30,000.00 in interest, with the £300,000 repaid at the end.
Lenders may calculate interest differently (some charge it daily), so your actual interest can differ slightly.
Paying less interest
Repaying sooner, for example by selling or refinancing early, reduces the interest. Check whether the lender charges a minimum interest period.
Inputs for the hard money loan interest calculator
Amount to borrow
The amount you want to borrow.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many months you'll repay over. A longer term means paying interest for longer.
Repayment type
Interest only means paying just the interest, with the loan repaid at the end.
CALCULATOR QUESTIONS
Hard money loan interest calculator questions
What is a hard money loan?
A short-term loan secured on property and based mainly on the property's value. In the UK this is usually called bridging finance.
Are hard money loans interest-only?
Often, with the loan repaid at the end from a sale or refinance.
Does this include fees?
No. Arrangement and exit fees are common, so add them to see the full cost.
How much interest on a £300,000 loan at 10%?
Interest-only for 12 months, £30,000.00.