How Much Do Hard Money Lenders Charge? Fees and Costs Explained

In the competitive world of real estate investing, understanding financing costs is crucial for maximizing returns. If you're asking, "how much do hard money lenders charge" or "what percent do hard money lenders charge," you're not alone. Hard money loans provide a reliable, asset-based alternative to traditional bank financing, especially for fix-and-flip or BRRRR strategies. At Property Flip Loan, we believe hard money lending offers investors a straightforward path to funding without the red tape of banks.

While rates and fees can vary, hard money loans are designed for short-term use, emphasizing speed and flexibility over long-term costs. Let's break down what hard money lenders charge, including interest rates, origination fees for hard money loans, and other common expenses, to help you make an informed decision.

Typical Hard Money Loan Interest Rates

The primary cost in hard money lending is the interest rate, which compensates lenders for the higher risk and quick turnaround. In 2026, hard money loan interest rates generally range from 8% to 15%, paid interest-only during the term (usually 6–12 months). This structure keeps monthly payments low, allowing investors to focus capital on rehab rather than principal reduction.

At Property Flip Loan, our approach means rates can start low for qualified deals, depending on factors like:

• Loan-to-Value (LTV) or After-Repair Value (ARV): We lend up to 65% of ARV or 85% of Loan-to-Cost (LTC), ensuring a strong equity cushion.

• Borrower Experience: Seasoned flippers often secure lower rates due to proven track records.

• Property and Market: Stable Maryland markets like Baltimore or the Eastern Shore may qualify for better terms.

Compared to traditional bank loans (around 6%–8%), hard money rates are higher—but they enable deals that banks won't touch. That includes distressed properties, major renovations, fast closings, short timelines, unconventional borrower profiles, or situations where speed and certainty matter more than a low rate.

Origination Fees and Other Hard Money Lender Fees

Beyond interest, hard money lender fees include upfront charges to cover underwriting and processing. The most common is the origination fee for hard money loans, typically 1%–3% of the loan amount. This fee is deducted at closing and reflects the lender's work in evaluating the deal.

At Property Flip Loan, our origination fees are competitively, keeping costs predictable. Other potential fees include:

• Appraisal/Inspection Fees: $500–$1,000 to verify ARV and monitor rehab progress.

• Draw Fees: Minimal or none for milestone-based releases during construction.

• Extension Fees: If you need more time beyond the initial term, expect 0.5%–1% per month—though our no-prepayment penalty allows early exits without extra costs.

• Legal/Closing Fees: $800–$1,500, similar to any real estate transaction.

We avoid junk fees, focusing on transparency to help investors budget effectively. Total closing costs often land at 2%–5% of the loan, far less burdensome than the drawn-out process of banks.

What Influences Hard Money Loan Costs?

Several factors determine what hard money lenders charge:

• Deal Strength: Strong ARV comps and clear exit strategies (e.g., flip or refinance) lead to lower rates.

• Market Conditions: In stable areas like Anne Arundel or Montgomery Counties, rates may trend lower due to reduced risk.

• Loan Size: Larger loans (e.g., $200K+) often qualify for discounted fees.

• Economic Factors: With the new Fed Chair Kevin Warsh's nomination signaling potential rate cuts in 2026, hard money rates could ease slightly as borrowing costs for lenders decrease.

Remember, these costs are short-term investments in opportunity—hard money enables fast closes on deals that generate 20%–30% ROI after flips.

Why Choose Hard Money Despite the Costs?

While what do hard money lenders charge may seem higher upfront, the value lies in execution. Traditional banks require perfect credit, W-2s, and 30–60 day closings, often rejecting flips altogether. Hard money qualifies based on the deal's economics, with minimal paperwork: just send your property details, budget, and timeline for a same-day soft quote.

Pros of hard money:

• Speed: Close in 7–14 days to beat competition on auctions or off-market gems.

• Flexibility: Ideal for self-employed investors or credit rebuilders.

• Structured Funding: Acquisition + rehab draws keep projects on track.

• No Prepay Penalties: Exit early via sale or refi without fees.

Cons are minimal for short-term use: higher rates are offset by quick profits.

At Property Flip Loan, we specialize in Maryland hard money loans with investor-focused terms. Whether you’re flipping in Salisbury or Ocean City — or anywhere in Maryland — our rates and fees are built for success.

Ready to crunch the numbers on your next deal? Contact us for a free quote today—let's align costs with your profits!