Hard Money Loan Interest Rates in 2025: What to Expect

Hard Money Rates in 2025

Interest rates are often the first question investors ask about hard money loans. Understanding current rates, what affects them, and how to get the best pricing helps you evaluate deals and choose lenders effectively.

Current Rate Environment

As of late 2024/early 2025, typical hard money rates:

Loan Type	Rate Range	Points
Residential fix/flip	9.5% - 12%	1-2.5
Bridge loan	9% - 11%	1-2
Construction	10% - 13%	1.5-3
Commercial bridge	10% - 13%	2-3

These are general ranges—specific rates depend on multiple factors.

What Determines Your Rate

1. Loan-to-Value (LTV)

Lower LTV = Lower rate

LTV	Rate Impact
Under 60%	Best rates
60-70%	Standard rates
70-75%	Higher rates
Over 75%	Premium rates

2. Property Type

Some properties command better rates:

Lower rates:

●Single-family residential

●Primary markets

●Good condition

Higher rates:

●Rural properties

●Unique property types

●Poor condition

3. Borrower Experience

Track record matters:

●First-time investor: Higher rates

●Experienced investor: Better rates

●Repeat borrower with lender: Best rates

4. Loan Amount

Size affects pricing:

●Very small loans (<$200K): Higher rates (more work, same risk)

●Mid-size ($200K-$1M): Standard rates

●Larger loans (>$1M): Potentially better rates

5. Exit Strategy

Clearer exits get better rates:

●Strong exit plan: Standard rates

●Uncertain exit: Higher rates

●Proven exit capability: Best rates

6. Market Conditions

External factors:

●Federal funds rate

●Investor capital availability

●Real estate market strength

●Competition among lenders

Comparing Rate Quotes

When evaluating lenders, look at total cost:

APR vs. Rate

Points and fees affect true cost. A 10% rate with 3 points may cost more than 11% with 1 point on a short loan.

Example Comparison

6-month $500,000 loan:

Lender	Rate	Points	Total Interest	Total Points	Total Cost
A	10%	3	$25,000	$15,000	$40,000
B	11%	1	$27,500	$5,000	$32,500
C	10.5%	2	$26,250	$10,000	$36,250

Lender B is cheapest despite highest rate!

Other Fees to Consider

●Document fees: $500-$2,500

●Legal fees: $1,000-$3,000

●Processing fees: $500-$1,500

●Extension fees: 0.5-1%

How to Get Better Rates

1. Bring More Equity

Lower LTV = Lower rate. If you can put more cash in, your rate drops.

2. Build Relationship

Repeat borrowers earn better rates. Start a relationship and prove yourself.

3. Present Professionally

Clean applications, organized documents, and clear business plans signal professionalism.

4. Have Strong Exit

Demonstrate clear, credible exit strategy with evidence.

5. Negotiate

Don't accept first quote. Ask if they can do better, especially if you have competing offers.

6. Volume Commitment

If you'll do multiple deals, commit to volume for better pricing.

Rate vs. Speed Tradeoff

Sometimes paying a higher rate is worth it:

When Higher Rate Makes Sense

●Capturing below-market deal

●Beating competition to property

●Time-sensitive opportunity

●When profit margin is large

Example

You can get a $2M property for $1.5M, but need to close in 7 days:

●Higher rate lender: 12%, closes in 5 days

●Lower rate lender: 10%, closes in 21 days

The lower rate lender can't help you capture the opportunity. The "cost" of the higher rate is far less than the profit from the deal.

Trinity Mortgage Fund Rates

Our current rates:

Product	Rate	Points
Residential bridge	9.99% - 10.99%	1.5-2.5
Fix and flip	9.99% - 10.99%	1.5-2.5
Construction	10.5% - 11.5%	2-3

Rates depend on specific deal characteristics. Contact us for a quote on your project.

The Bottom Line

Hard money rates are higher than conventional loans—that's the trade-off for speed, flexibility, and access. But within the hard money market, rates vary significantly.

Focus on:

●Total cost, not just rate

●What you get for the price (speed, reliability)

●Building relationships for better terms

●Whether the deal works at the rate offered

The best rate is the one that helps you close profitable deals reliably.