Fix and Flip Loan Rates
AAPL Member · Direct Lender Since 2016 · NMLS #1979189
On a flip, the rate matters less than most investors think — and the total cost matters more. Because you hold the loan for months, not years, the headline interest rate is only one input into your real cost of capital, alongside points and how the rehab funds are structured. A fix and flip loan is a short-term, interest-only hard money loan, priced on the deal: your leverage, the project’s margin, and your experience. This page explains the components of your cost and what moves your number, so you can price a flip accurately instead of fixating on the rate alone. We’ve priced fix and flip loans as a direct lender since 2016.
Why Total Cost Beats the Headline Rate
On a six-month flip, a one-point difference in origination can outweigh a meaningful difference in rate, because points are paid once up front while interest accrues only over a short hold. The two cost components are the interest rate (charged interest-only on the balance) and points (a one-time origination fee). When you model a flip, run both together over your actual expected timeline — our hard money loan estimator does this so you see the all-in carrying cost against your projected profit, not just a rate.
You Only Pay Interest on What You've Drawn
Here’s a structural feature that affects your real cost more than a fraction of a point on the rate: the rehab funds are released by draw, and on most fix and flip loans you pay interest only on the money actually disbursed, not the full committed amount. So in the early months — when you’ve drawn the purchase money but little of the rehab — your carrying cost is lower than the loan’s face amount would suggest. A lender’s draw process and whether it charges interest on undrawn funds (“Dutch” interest) can matter as much to your bottom line as the quoted rate.
What Drives Your Rate
Your number lands within the market range based on a handful of factors. Leverage comes first: higher LTC/ARV leverage prices higher, and bringing more cash lowers your rate. Margin matters — a deal comfortably under 70% of ARV is lower-risk and prices better than a thin one. Experience helps, as completed flips earn better pricing while first-timers price a bit higher. Credit plays in — there’s no minimum, but stronger credit improves the rate. And the market sets the baseline, since pricing moves with the broader rate environment.
Term and Exit
Fix and flip loans typically run 12 months, interest-only, sized to your renovation timeline. Confirm the prepayment terms — a flip that sells in four months shouldn’t carry a long minimum-interest charge, so ask about any minimum-interest period up front. Your exit is usually the sale; if you pivot to a hold, you refinance into a DSCR loan, and the flip’s interest cost ends when that permanent loan funds. The requirements page covers what we evaluate to price your deal, and you can compare the broader short-term side on our hard money loan rates today page.
What Affects Your Fix and Flip Rate
What Affects Your Fix and Flip Rate
Frequently Asked Questions
They vary by deal and move with the rate environment, so there’s no single number worth posting. Your rate depends on leverage, the deal’s margin, your experience, and your credit. Because a flip is a short hold, focus on total cost — rate plus points over your timeline — rather than the rate alone.
Because points are paid once up front while interest accrues only over a few months, a loan with a low rate but high points can cost more on a short flip than one with the reverse. Always model rate and points together over your actual expected hold.
On most fix and flip loans, you pay interest only on the funds you’ve actually drawn, not the full committed amount. Since rehab money is released by draw as the work progresses, your early carrying cost is lower than the loan’s face value suggests.
Typically around 12 months, interest-only, sized to your renovation timeline. It’s short-term by design and meant to be repaid by the sale, or refinanced into a long-term DSCR loan if you decide to hold the property.
Yes — bring more cash to reduce leverage, bring a wider-margin deal under 70% of ARV, strengthen your credit, or lean on a track record of completed flips. Each lowers our risk and your pricing, and we can shift cost between rate and points to fit your hold.
Want a real number on your flip?
Tell us the property, the ARV, and your rehab budget. We price our own loans and run our own draws, so your quote is real and interest accrues on drawn funds only.