How hard money and fix-and-flip loans work, with real terms
A fix-and-flip loan, often called a hard-money loan, is a short-term, interest-only loan secured by the house you’re renovating. The lender advances most of the purchase price at closing and pays for the rehab in draws as the work gets done, and you repay everything when you sell. Rates are higher than a mortgage: advertised starting rates ran from 7.75% to about 10% among the 18 fix-and-flip lenders we compare, read October 24, 2026.
The three limits that set your loan
Loan to cost (LTC). The share of the purchase price, and sometimes the total cost, the lender will fund. Published top tiers run from 90% (CIVIC, Roc Capital through brokers, New Silver, Upright) to 100% of the purchase price (Kiavi’s headline, Rehab Financial Group’s 100% program).
Rehab funding. Most lenders publish that they fund 100% of the rehab budget. The catch is timing: on most loans you pay the contractor first and the lender reimburses you after an inspector confirms the work, so you need cash to float each stage. Easy Street and Temple View publish advance-draw options.
ARV cap. The loan can’t exceed a share of the after-repair value. Most published caps sit at 75% (ABL, CIVIC, Easy Street, Lima One, New Silver, Park Place, Temple View, Upright, and RCN’s top tier), with Groundfloor at 70%, Kiavi at 80%, and Rehab Financial Group at 65% to 75% depending on credit and experience. RCN’s own tiers drop to 60% for a first-timer. On a cheap house with a big rehab, this is the limit that bites.
The lender takes the lowest of the three. The calculator tells you which one binds on your deal.
What it costs
- Interest, usually paid monthly and interest-only. A $244,000 loan at 10.5% costs about $2,135 a month once fully drawn.
- Points, a percent of the loan paid at closing. Published ranges include 0 to 2 points (ABL, Easy Street), 1 to 1.75% origination (New Silver) and 1 to 3 points (Park Place). Two points on $244,000 is $4,880.
- Fees for underwriting, documents, draws and inspections. Easy Street publishes a $1,995 document fee; Center Street publishes $250 to $350 per draw inspection; Groundfloor lists a $495 application fee and $1,250 of closing costs plus an underwriting fee of 1% to 3.75%.
Dutch interest
Some lenders charge interest on the whole loan from the day it closes, including rehab money you haven’t drawn yet. That is called Dutch interest. Others charge only on what has been drawn, and LendingOne advertises “No Interest on Undrawn Rehab Funds.” On the calculator’s example, switching to Dutch interest adds about $1,440 over six months. Ask every lender which way it works.
Prepayment and extensions
Six of the 18 say outright that there’s no prepayment penalty (ABL, Easy Street, Kiavi, LendingOne, Park Place, Express Capital), which matters because the plan is to pay the loan off early. Groundfloor says there’s no penalty after three months but has a three-month minimum interest. Extension fees apply if the term runs out before you sell; Rehab Financial Group’s 9-month term comes with a 3-month optional extension “(extension fees apply).”
Who these loans are for
Fix-and-flip loans are business-purpose loans. Lenders publish that they lend only on non-owner-occupied property, and many lend only to an LLC or other entity, not to you personally. Lima One’s disclosures, for instance, say loans “are made only to business entities.” If you plan to live in the house, you need a different loan.
Bridge loans
A bridge loan is the same structure without the rehab: short-term financing to buy a property quickly or to hold it until you sell or refinance. Park Place Finance, for example, publishes bridge loans of $100,000 to $5,000,000 at 8.99%, with loan-to-cost up to 80%.
Comparing two term sheets
Put both into the calculator on the same deal. A lower rate with three points can cost more than a higher rate with one point on a short flip, and Dutch interest or a big draw fee can flip the comparison again. Then check the lender table for who funds your state, and send your deal for real quotes.
Sources
Lenders’ published terms as read on their own websites on October 24, 2026; each lender page on this site links to its source. See the lender comparison.
Questions people ask
What are hard money loan rates right now?
Advertised fix-and-flip starting rates among the lenders we compare ran from 7.75% (Lima One Capital) to about 10% (Express Capital Financing) when we read their sites on October 24, 2026. Those are best-case starting rates; most borrowers pay more, depending on experience, credit and how much you borrow.
How long is a fix-and-flip loan?
Usually 12 months, with published terms running from 6 to 24 months. Most are interest-only with the whole balance due when you sell or refinance. Ask what an extension costs before you need one.
Can I get a hard money loan with no experience?
Several lenders publish that no experience is required, including CIVIC, CoreVest, Easy Street Capital, New Silver and Upright. Expect a smaller loan or a higher rate as a first-timer; RCN Capital, for example, publishes 70% of purchase and a 60% ARV cap for borrowers with no completed flips on moderate rehabs.