Hard money points and fees, line by line

Points get the attention because they are the biggest single number. They are rarely the reason a loan turns out more expensive than expected - the reason is usually the six or seven smaller items that were never in the comparison at all.

Here is the full stack. Ranges are what lenders commonly disclose; ranges reflect pricing lenders and industry write-ups publicly advertised as of August 2026. They are advertised ranges, not transaction data - unlike conventional mortgages, private lending has no public loan-level dataset, so nobody can honestly claim to know the true national average. Treat them as a sanity check on a quote, not a benchmark you are entitled to.

The nine fees

Fee	Typical range	What to know
Origination / points	1.0%-4.0% of the loan	The headline fee. Usually charged on the total facility - purchase piece plus the rehab holdback you have not drawn yet - not on the money you receive at closing.
Underwriting or processing fee	$500 - $1,500	Flat, charged whether or not the loan closes at some lenders. Ask which.
Document preparation fee	$300 - $1,500	Sometimes paid to an affiliated entity of the lender. Worth asking.
Appraisal or valuation	$450 - $1,200	Higher for a full appraisal with an ARV opinion than for a broker price opinion.
Draw inspection fee	$150 - $350 per draw	Multiply by the number of draws in your budget. Six draws at $250 is $1,500 that never appears in the rate.
Wire and servicing fees	$25 - $150 each	Small individually. They recur monthly at some servicers.
Extension fee	0.5%-2.0% of the loan, per extension	The single most commonly triggered fee on this list, because projects run late.
Exit or back-end fee	0% - 2% of the loan	Charged at payoff. Not every lender has one; the ones that do rarely lead with it.
Prepayment or minimum interest	3 - 6 months guaranteed	You owe the interest whether or not the loan is outstanding that long. On a fast flip this is often the largest hidden cost in the deal.

Points: the detail that costs money

One point is one percent of the loan, charged at closing. The question that matters is one percent of what.

Why small loans are disproportionately expensive

Flat fees do not scale. A $1,495 doc fee, a $750 underwriting fee and a $750 appraisal are $2,995 on any loan size. On a $500,000 loan that is 0.6%. On a $75,000 loan it is 4%, before points and before a single day of interest.

If you are borrowing under about $150,000, compare lenders on total dollars rather than on rate and points, because the flat fees will dominate.

Draw fees are a real line item

At $250 per draw, a rehab with eight draws costs $2,000 in inspection fees. Some lenders charge nothing; some charge $350 plus a wire fee each time. Ask how many draws your budget will realistically require, then multiply.

Extension fees are the most commonly triggered fee on the list

Renovation projects run late. That is not a character flaw, it is the base rate. An extension fee of 0.5%-2.0% on a $300,000 loan is $1,500-$6,000 each time, and it is charged on top of the interest that keeps accruing.

What is actually negotiable

Points: Somewhat, and mostly through leverage: a lower LTV, a proven track record, or a competing written quote. Half a point is a realistic ask.
Doc and processing fees: Often, especially if they are the lender's own fees rather than a third party's. Ask for them to be waived or capped.
Draw fees: Frequently, or at least the number of free draws.
Exit fees: Sometimes removable entirely. Always worth asking - it is pure margin.
Minimum interest: Occasionally reducible by a month or two. This is the highest-value thing to negotiate on a fast flip and almost nobody asks.
Rate: Least negotiable of all, and the one everybody focuses on.

Questions people actually ask

What is the typical interest rate for a hard money loan?

Most quotes land in 10% to 12%, with fix-and-flip paper generally 9.0% to 14.0% and first-time borrowers or unusual collateral running up toward 18.0%. Ranges reflect pricing lenders and industry write-ups publicly advertised as of August 2026. They are advertised ranges, not transaction data - unlike conventional mortgages, private lending has no public loan-level dataset, so nobody can honestly claim to know the true national average. Treat them as a sanity check on a quote, not a benchmark you are entitled to.

But the interest rate is the least useful number on the term sheet. A loan at 10% with 3 points, a $1,495 doc fee, six months of guaranteed interest and interest charged on the undrawn rehab holdback is substantially more expensive than a loan at 12% without those terms. Compare all-in cost, never rates.

What's the typical interest on a hard money loan?

See above - 10% to 12% is the common band. The more useful question is what the loan costs in total dollars over the months you will actually hold it, which is what the true-cost calculator computes.

What do points mean on a hard money loan?

One point is one percent of the loan amount, charged up front. Two points on a $300,000 loan is $6,000, usually deducted from your proceeds at closing rather than billed.

The detail that costs people money: ask whether points are charged on the total loan facility or on the initial funding. If you are borrowing $240,000 for the purchase and $60,000 for rehab, two points on the $300,000 facility is $6,000 - but you only receive $240,000 at closing, so you paid 2.5% on the money you actually got. That gap is standard and rarely volunteered.

How much is 2 points on a $50,000 loan?

$1,000. Points are simply a percentage of the loan amount, so two points is 2% - and on a small loan the flat fees matter far more than the points. A $50,000 loan with 2 points ($1,000) plus a $1,495 doc fee and a $750 underwriting fee carries $3,245 of closing cost, which is 6.5% of the loan before a day of interest. Flat fees are why small hard money loans are disproportionately expensive.

What are the fees associated with hard money loans?

There are usually nine, and a term sheet typically leads with two. The full stack is origination points, underwriting or processing, document preparation, valuation, per-draw inspection, wire and servicing, extension, exit or back-end, and minimum or guaranteed interest. The fee stack, line by line walks through each one with the range you should expect and the question to ask about it.

How to calculate hard money loans?

Not the way most calculators do it. The typical online hard money calculator multiplies loan amount by rate by months and adds points. That undercounts real cost, often badly, because it ignores five things: interest charged on the undrawn rehab holdback, minimum-interest clauses, per-draw fees, extension fees on the months you run over, and the flat fees that dominate on smaller loans.

The honest calculation is: (all interest actually charged under the lender's accrual method) + (points on the basis the lender uses) + (every flat fee) + (draw fees x draws) + (exit fee) + (extension fees if you run long), then expressed as an annualised rate on the money you actually had use of. Ours does that: true-cost calculator.