Refinance Hard Money Loan Cost Calculator

This calculator estimates the monthly principal-and-interest payment and total interest for a refinance loan using the amount borrowed, APR, and term. Enter the proposed refinance loan amount, the lender’s quoted APR, and the repayment term; the results do not include closing costs or other fees.

Formula

The calculator uses the standard fixed-payment loan formula. Let P be the amount refinanced in dollars, APR the annual percentage rate as a percent, r the monthly rate, and n the number of monthly payments. It calculates:

• Monthly rate: r = APR / 1200.
• Number of payments: n = years × 12.
• Monthly principal-and-interest payment: M = P × r / [1 − (1 + r)⁻ⁿ].
• Total interest over the term: I = M × n − P.

The APR input is entered as a percentage, so 8 means 8% per year. The formula assumes a fixed rate and level monthly payments. It does not calculate a refinance quote or determine fees; those amounts must come from the lender.

Worked Example

Using the calculator’s default inputs—$20,000, an 8% APR, and 5 years:

1. Convert the annual APR to a monthly rate: r = 8 / 1200 = 0.0066667.
2. Convert the term to monthly payments: n = 5 × 12 = 60.
3. Substitute into the payment formula: M = 20,000 × 0.0066667 / [1 − (1.0066667)⁻⁶⁰].
4. The monthly principal-and-interest payment is $405.53.
5. Total interest using the rounded monthly payment is $405.53 × 60 − $20,000 = $4,331.80.

Assumptions

• The interest rate stays fixed throughout the term.
• Payments are made monthly, with the first payment one month after the loan starts.
• Interest is modelled monthly at APR divided by 12.
• Closing costs, origination charges, appraisal or title charges, taxes, insurance, escrow, late fees, and any existing-loan payoff charges are not included.

What Refinancing a Hard Money Loan Costs

“Refinance cost” can mean more than the payment or interest shown by this calculator. Refinancing usually involves replacing an existing loan with a new one. The amount needed to close may include the old loan’s payoff balance, accrued interest through the payoff date, any charges required under the existing contract, fees for the new loan, and funds needed to meet the new lender’s closing conditions.

Some transaction costs may be paid in cash; others may be added to the new principal if the lender permits it. If costs are financed, the loan balance and the interest charged over time both increase. For a useful estimate, request a written breakdown that distinguishes the amount used to repay the old loan from fees and other closing funds. Do not assume that a quoted “loan amount” is the same as the cash you receive.

How to Estimate the Full Refinance Cost

Start with the proposed new loan amount and the actual APR and term from the lender’s documents. Then gather the payoff statement for the current hard money loan and an itemized estimate of new transaction charges. A practical checklist is:

• Confirm the existing payoff amount and the date through which it is valid.
• Check the current loan agreement and payoff statement for any applicable exit, prepayment, or accrued-interest charges.
• Ask which new-loan costs are paid at closing and which, if any, are included in the principal.
• Compare the new loan’s total scheduled payments with the amount borrowed, while separately accounting for fees paid in cash.
• Ask how the payment or balance changes if the loan has a variable rate, interest-only period, balloon payment, or other feature not represented here.

For example, if a lender’s proposed principal includes both the payoff and financed charges, use that complete principal as the calculator input. The displayed interest then estimates interest on that amount under the stated assumptions. Add cash-paid charges separately to understand the total cash required; do not add financed charges a second time.

Why Hard Money Refinances Can Be Complicated

Hard money loans are commonly structured around real estate collateral and may have short terms or payment structures that differ from a standard fully amortizing loan. A refinance can therefore involve a timing issue: the new loan must close in relation to the existing loan’s due date, and the property and borrower must meet the new lender’s requirements. Those requirements and costs vary by transaction, so they cannot be inferred from a general calculator.

Another common misunderstanding is that a lower monthly payment automatically means a lower overall cost. A longer repayment term can reduce the scheduled monthly payment while increasing the total interest, because the balance is paid down over more months. A comparison should account for the remaining time on the current loan, any costs of replacing it, the new term, and the payment structure—not just one monthly figure.

What This Calculator Does Not Show

This tool models a conventional fixed-rate, fully amortizing payment. It does not calculate the payoff balance on the existing loan, lender-specific fees, cash due at closing, a variable-rate payment, interest-only payments, a balloon balance, or the effect of irregular payment dates. It also does not determine whether a lender will approve a refinance or what terms it will offer.

Use the result as a mathematical estimate, not a quote. For a complete cost comparison, obtain the new loan’s itemized disclosure and the existing loan’s payoff figure, then check that both refer to compatible dates and include the same categories. A calculator result can differ from a lender’s figures because of payment timing, rounding, daily interest, fees, and contract terms.

Frequently Asked Questions

How much does it cost to refinance a hard money loan?
The total depends on the existing payoff amount, any applicable charges under the current loan, new-loan fees, and whether costs are paid upfront or financed. This calculator estimates payment and interest only; use lender documents for transaction-specific figures.

Does the calculator include closing costs?
No. It calculates principal-and-interest payments and scheduled interest from the principal, APR, and term. Add cash-paid costs separately, and include financed costs in the loan amount if they are part of the proposed principal.

Does a lower refinance payment mean I pay less overall?
Not necessarily. A longer term can lower the monthly payment but increase total interest. Fees and the existing loan’s payoff terms also affect the comparison.

What loan amount should I enter?
Use the proposed new principal shown in the lender’s estimate. If that amount includes financed fees, include them once; do not use only the cash you expect to receive if the loan also repays an existing balance.

Can I use this for an interest-only or balloon loan?
No. The formula assumes equal monthly payments that gradually repay principal and interest over the full term. For interest-only or balloon structures, use the lender’s schedule and account for the final balance separately.

This result is an estimate, and the lender’s disclosure gives the exact figures.

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in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2