Hard Money Loan Rates: What Drives Your Rate

Trato publishes a starting rate, starting origination, and term for each program, all subject to underwriting.

These are reference points, not a quote. They describe where pricing begins for a strong file, and the rate on your deal is set after review.

A hard money rate is the interest charged on the loan balance, and it does not include points, origination, or other closing costs.

Interest is usually paid monthly on the funded balance, and many short-term programs use interest-only payments. Points, also called origination, are a percentage of the loan paid at closing. Other costs can include appraisal, title, insurance, legal or document fees, draw inspections on renovation and construction loans, and any extension fees if the project runs long.

Two quotes with the same rate can cost very different amounts once points and fees are added. Ask for every charge in writing so you can compare the full picture.

For a full walk-through of these costs, read the real cost of a hard money loan.

Your rate moves with the risk the lender sees in the deal, so stronger files tend to price closer to the starting rate.

Experience matters because completed projects show you can manage a budget and a timeline. Leverage matters because a larger loan relative to cost or value leaves less room if the plan changes. Property type and location affect how easy the asset is to value and sell. A heavy rehab or a complex build carries more execution risk than a light cosmetic scope.

Credit, liquidity, and loan size are also reviewed. Cash in reserve after closing helps a file, and so does a clear exit through a sale or a refinance. No single factor sets the rate. Underwriting weighs them together for the specific property.

The total cost of a loan matters more than the rate alone, because points, fees, and the length of the hold all add to what you pay.

A short hold puts more weight on points and closing costs, since they are paid once no matter how quickly you repay. A longer hold puts more weight on the monthly interest. Extensions, if needed, can add cost late in the project when margins are thinnest.

Build your budget with interest for the full expected hold plus a cushion, then add origination and closing costs. Our free Fix and Flip Deal Analyzer can help you test how financing costs change your profit before you make an offer.

DSCR rental loans usually start at lower rates than short-term hard money loans because they finance stabilized rentals over a longer term.

The DSCR Rental program starts at 6.50% with a 30-year term, while the short-term programs start at 9.00% for Fix & Flip and 10.00% for Bridge and Ground Up Construction, all subject to underwriting. Short-term loans fund properties that are being bought, renovated, or built, so the risk and the pricing are different.

Many investors use both. A hard money loan funds the purchase and renovation, and a DSCR loan refinances the finished rental for the long term.

Compare the two in detail in our hard money vs DSCR loan guide.

The fastest way to learn your rate is to submit the actual deal so it can be priced against the property and your plan.

Include the address, purchase price or current value, rehab or construction budget, expected value after the work, your experience, and how you plan to repay the loan. Clear, complete numbers help the review move without back and forth. Indicative terms follow an initial review, and final terms are confirmed in underwriting.

When you are ready, submit your deal for a quote.