Investor guide. Updated September 2026
How much does a hard money loan cost in Massachusetts in 2026?
As of September 2026, a hard money loan in Massachusetts typically costs 9% to 13% interest (interest-only, paid monthly) plus 1 to 3 origination points, with closing costs of roughly $2,500 to $5,000 for legal, title and lender fees. On a 12-month $500,000 fix and flip loan, expect all-in financing cost in the range of $55,000 to $80,000 if you hold the full term, and less if you sell or refinance early.
The three numbers that make up the cost
Every hard money quote breaks into the same three parts. Ask for each one separately, because a low headline rate with high points can cost more than the reverse.
| Component | Typical Massachusetts range, 2026 | How it is charged |
|---|---|---|
| Interest rate | 9% to 13% (stronger borrowers and lower leverage price at the low end) | Interest-only, monthly. Some capital sources charge on the full loan amount, others only on funds drawn. |
| Origination points | 1 to 3 points (1 point = 1% of the loan amount) | Deducted from proceeds at closing. |
| Fees | $2,500 to $5,000 | Lender legal and doc prep, processing, appraisal or BPO, title insurance, recording. Massachusetts is an attorney closing state, so a closing attorney fee is always part of the number. |
What moves the rate up or down
- Leverage. A loan at 70% of purchase price prices better than one at 90% of cost. Every capital source has tiers, and the tier you land in matters more than negotiating.
- Experience. Borrowers with three or more completed flips or builds in the last three years see the best pricing. A first project is financeable, but usually at lower leverage and a slightly higher rate, not a decline.
- Credit. Most programs floor around 640 to 660. Pricing improves meaningfully above 700 and again above 740.
- Property and market. A two-family in Quincy or a single in Worcester prices differently from a mixed-use building in a thin market. Liquid exits price better.
- Loan size. Loans under $150,000 often carry minimum fees that raise the effective cost. Loans over $1 million usually see better terms.
A worked example: $500,000 fix and flip in Greater Boston
Purchase price $450,000, renovation budget $150,000, after-repair value $750,000. A typical structure is 85% of purchase plus 100% of the rehab budget, capped at 70% of ARV, which lands at roughly $500,000 total loan.
| Item | Amount |
|---|---|
| Interest at 11% for 12 months, interest-only | $55,000 (less if the rehab funds are drawn over time and interest is charged only on drawn balances) |
| 2 origination points | $10,000 |
| Closing costs (attorney, title, appraisal, recording) | $4,000 to $6,000 |
| Extension fee if you need a 13th month | Commonly 0.5 to 1 point |
If the project sells in month eight, interest drops to roughly $37,000 and the all-in cost is closer to $52,000. That is why speed of execution is the biggest lever on financing cost, more than the rate itself.
Costs that catch first-time borrowers
- Interest reserve. Some capital sources hold 3 to 6 months of interest out of proceeds at closing. It is your money, but it is not in your pocket on day one.
- Draw fees. Each rehab draw usually costs $150 to $300 for the inspection.
- Prepayment. Most short-term loans have no prepayment penalty, but some have a 3 to 6 month minimum interest. Ask.
- Default rate. If you go past maturity without an extension, the rate can step up sharply. Plan the exit before you close.
How 316 Capital prices a deal
316 Capital is a private lending and capital advisory firm. Rather than one rate card, we place each file with the institutional capital partner whose credit box fits it, which is how a deal that is a decline at one source closes at another. Origination is quoted per deal and disclosed in writing on the term sheet before you spend a dollar. There is no application fee and no credit pull to get initial pricing.
Price your deal, no cost, no credit pull
Send the address, purchase price, budget and target loan amount. One point of contact from pricing through closing.
Request terms Estimate pricingCommon questions
Is a hard money loan cheaper than a bank loan?
No. A bank construction or commercial loan is usually 2 to 4 points cheaper on rate. Investors use hard money because it closes in days instead of months, funds the renovation budget, and qualifies on the asset rather than tax returns and debt-to-income.
Are hard money rates in Massachusetts higher than the rest of the country?
Not materially. Pricing is set by national capital sources and by the borrower and deal, not the state. Massachusetts closing costs are a little higher because every closing runs through an attorney and title insurance is standard.
Do I pay interest on the rehab budget before I draw it?
It depends on the capital source. Some charge interest on the full loan amount from day one, others only on the drawn balance. On a large rehab budget the difference can be several thousand dollars, so ask which structure you are being quoted.
Can I get pricing without a credit pull?
Yes. 316 Capital quotes initial terms from the property address, purchase price, rehab budget, target loan amount and a rough sense of credit and liquidity. A credit report is pulled only once you accept terms and move into underwriting.
What is the cheapest way to lower my hard money cost?
Lower leverage and a faster exit. Bringing 5% more cash to closing often drops a full rate tier, and every month you shave off the hold saves close to 1% of the loan amount in interest.
316 Capital is a private lending and capital advisory firm. We arrange business-purpose real estate financing through institutional capital partners; loans are not available for owner-occupied primary residences. Figures on this page are typical market ranges as of September 2026 and are not an offer or commitment. Every quote is transaction-specific and subject to underwriting. Contact info@316cap.com or +1 (617) 546-4817.