Hard money points vs. rate calculator

What are points?

A point is an upfront fee equal to 1% of the loan amount, paid at closing. On a $175,000 loan, 2 points is $3,500. Lenders often trade rate for points: pay more points and you get a lower rate, pay fewer and the rate goes up.

Why short holds usually favor fewer points

Points are paid once, no matter how long you keep the loan. Interest is paid every month. On a long hold, a lower rate has time to earn back the extra points. On a typical 4–8 month flip it often doesn't, so the quote with the "worse" rate and fewer points can be cheaper overall. The break-even month above tells you how long you'd have to hold the loan before the lower-rate quote catches up.

What to plug in

• Use the lender's written quote: rate, points, and every flat fee (origination, underwriting, processing, doc prep).
• Be honest about the hold. Add a month or two for permits, contractor delays, and time on market.
• Ask about extension fees and minimum-interest clauses. They change the math if the project runs long.

See which lenders publish what on our fix-and-flip rate tracker, then run the whole deal in the flip profit calculator.

General information, not financial advice.