How Much Do Hard Money Lenders Make on a Loan?

Where a hard money lender's money comes from

This page isn't about what loan officers earn. It measures what a single loan earns the lender who funds it. That revenue, which the app reports as gross lender revenue, has three parts.

• Points, a percentage of the loan collected at closing. AAPL's master class on private lending terminology (Anthony Geraci, July 2025) puts it plainly: "Origination fees (often 1-3 points) generate up-front revenue for the lender." In the calculators and the app, points are charged on the gross loan, rehab holdback included.
• Lender fees, flat processing, underwriting or document fees, also collected at closing.
• Interest, paid monthly or at payoff, on either the full loan or only the funded balance. The calculators and the app treat the loan as interest-only.

Revenue on one loan: two worked examples

Both examples run through the same engine as the iPhone app and assume the loan runs to maturity with every payment made. The first is a fix-and-flip loan: a $300,000 purchase with a $100,000 rehab, sized at $280,000 by the as-is limit.

The second is a private money deal where the borrower asked for $360,000. The program's limits only support $337,500, so the loan is cut back by $22,500, and revenue is earned on the smaller loan. It also carries a flat $995.00 fee and a 3-month minimum interest guarantee.

The larger loan earns more dollars ($41,495.00 against $39,200.00) at a lower rate and fewer points, but less per dollar lent. Its $8,859.38 minimum interest isn't in the total; it only matters if the loan pays off early. The private money loan calculator shows this lender view for any deal.

How the interest method changes revenue

On a loan with a holdback, whether interest runs on the full commitment or only on money disbursed moves revenue as surely as the rate does. Here is a $280,000 loan at 12% with $180,000 funded at closing and the $100,000 holdback released in three dated draws, priced both ways:

Charging interest on the undrawn holdback, often called Dutch interest, adds $3,785.75 on this loan. Funded-balance (non-Dutch) terms are more common in one large dataset: of 8,832 bridge construction loans in Lightning Docs data, 28% charged Dutch interest and 72% non-Dutch (AAPL, February 19, 2025). Compare both methods on your own schedule with the Dutch interest calculator.

Early payoffs and minimum interest

Every figure above assumes the loan runs to maturity. Short-term loans don't always get there: a flip that sells early stops paying interest the day it pays off. Points and fees are earned at closing either way, so an early payoff lowers total dollars but raises the return per month the money was out. A minimum interest clause puts a floor under the interest side, guaranteeing a set number of months even if the borrower pays off sooner. The calculators show it as a separate line and never add it to revenue; minimum interest, exit fees and prepayment works through the payoff math.

A simple annualized return (illustration)

Revenue in dollars doesn't say how hard the capital worked. One rough measure divides revenue by the average balance actually outstanding, then by the term in years. The app doesn't compute this; it's a simplified illustration using the draw schedule above.

The capital out is identical in both columns; only the charge differs. Treat these as rough gross yields. They ignore that points arrive at closing (which lowers the lender's net cash out), compounding, the timing of each payment, and the fact that an undrawn holdback still has to be available when the draw request comes in. Most of all, they're before every cost in the last section.

What the same loan earns at recent market pricing

Pricing moves, and published figures depend on who reports them. Three dated data points, each from a named source:

• NPLA, June 2026. The National Private Lenders Association's June 2026 market report (published July 9, 2026, with SFR Analytics and Private Lender Law) puts the median rate on residential transition loans (fix-and-flip and bridge) at 9.99% with median points of 0.98.
• SFR Analytics, March 2026. Its April 3, 2026 newsletter reported a March median RTL rate of 10.5% and median points of 2.0. The data is submitted by lenders and the sample varies; the points median moved from 2.0 to 0.98 between the March and June reports.
• AAPL, October 2024. Lightning Docs data in AAPL's February 19, 2025 State of the Industry article (Nema Daghbandan) shows the national average bridge rate falling from 11.6% in January 2024 to 10.99% in October, averaging 11.19% in Q3, with bridge points averaging 2.09% in October.

Here is the fix-and-flip loan from above re-priced at each set of figures, still 12 months, full balance, held to maturity. It's an illustration of sensitivity, not a forecast:

Medians and averages describe the middle of a reported sample, not any one lender's program, and none of these figures says what a lender keeps. For more context on rates, points and leverage limits, see typical hard money loan terms.

Gross revenue isn't profit

Gross lender revenue in the app is labeled "not net profit" for a reason. Before a lender keeps anything, the loan has to cover:

• Cost of capital. If the money comes from a credit line, a note to investors or a fund, much of the interest passes through to whoever supplied it. Even a lender's own cash has an opportunity cost.
• Idle capital. Money waiting between a payoff and the next closing earns nothing, and an undrawn holdback has to stay available. Revenue per loan says nothing about how many months a year the capital is actually lent.
• Servicing. Collecting payments, inspecting and funding draws, tracking taxes and insurance, and preparing payoff statements, whether in-house or through a servicer.
• Defaults and losses. Late payments, legal fees, foreclosure time, carrying costs on a property taken back, and any shortfall when it sells for less than the loan.
• Origination costs. Underwriting, valuation review, title and legal work not passed to the borrower, and any compensation paid to a broker who brought the deal.
• Overhead and taxes. Staff, insurance, software, accounting, any licensing the lender's state requires, and tax on interest and fee income.

None of these depend on the calculator, and none are in it. Use gross revenue to compare deals and programs on the same basis, then build the costs on top with your own numbers.