TAG Industries / TAG Private Lending / Guide / What a flip loan costs
Guide · November 2026
What a fix and flip loan costs.
Most of the cost of a short term flip loan comes from two numbers: the interest rate and the points. How long you keep the loan matters as much as either one.
The short answer
Our loans cost 10% to 18% a year in simple interest, paid monthly, plus 2 to 4 points at closing. On a $400,000 loan at 12% with 2 points, that is $4,000 a month in interest and $8,000 at closing. Kept for 12 months, the loan costs $56,000. Repaid after six, it costs $32,000.
The parts of the cost
| Cost | What it is | Our terms | When you pay it |
|---|---|---|---|
| Interest | A yearly rate on the loan amount | 10% to 18%, simple interest | Monthly |
| Points | A one time fee. One point is 1% of the loan | 2 to 4 points | At closing |
| Application fee | A fee to apply | None | Never |
| Third party costs | Title insurance, recording, and any appraisal or inspection | Set by those companies | At closing |
| Your own money | The part of the project the loan does not cover | Most borrowers bring 15% to 20% | At closing and during the work |
The most one of our loans can cost, counting interest and points together, is 26% APR. That limit matters most on short loans, where the points are spread over fewer months.
A $400,000 loan, month by month
The same example as on our terms: $400,000 at 12% interest only, with 2 points. Monthly interest is $400,000 × 12% ÷ 12 = $4,000.
| Repaid after | Interest | Points | Total cost | Share of the loan |
|---|---|---|---|---|
| 4 months | $16,000 | $8,000 | $24,000 | 6% |
| 6 months | $24,000 | $8,000 | $32,000 | 8% |
| 9 months | $36,000 | $8,000 | $44,000 | 11% |
| 12 months | $48,000 | $8,000 | $56,000 | 14% |
Each extra month costs about $4,000. Flips that lose money rarely lose it on the rate. They lose it when the work runs two or three months past plan.
Estimate your own, in seven steps
- Loan amount. Purchase plus renovation, minus the money you are putting in.
- Monthly interest. Loan amount × yearly rate ÷ 12.
- Timeline. Count the months to buy, permit, renovate, list and close the sale. Then add a cushion. Permits and inspections can add weeks.
- Total interest. Monthly interest × the number of months.
- Points. Loan amount × points ÷ 100.
- Closing costs. Ask the title company for an estimate early.
- Compare. Set the total against the profit you expect. If the deal only works when everything goes right, it is too tight.
Questions to ask any lender
- Is interest charged on the full loan from the start, or only on renovation money once it is released?
- How are draws paid, and how soon after an inspection?
- Is there a minimum interest period or a prepayment penalty?
- What happens if the project needs another month or two? Is there an extension fee?
- Will the terms in writing be the terms at closing?
Common questions
- What does a TAG Private Lending flip loan cost?
- 10% to 18% simple interest a year, paid monthly, plus 2 to 4 points at closing. There is no application fee, and the most a loan can cost, counting interest and points, is 26% APR.
- What does a $400,000 flip loan cost over a year?
- At 12% with 2 points, interest is $4,000 a month, or $48,000 for 12 months, plus $8,000 in points at closing: $56,000 in total. Repaid after six months, the total is $32,000.
- What are points on a loan?
- A one time fee paid at closing, as a percentage of the loan. One point is 1%, so two points on a $400,000 loan is $8,000.
- Is the rehab budget included in the loan?
- It can be. Rehab money is released in draws as the work is done and checked.
- Can I use a flip loan to buy a home I will live in?
- No. These are business purpose loans for investment property only.
For the bigger picture, including banks, home equity and partners, see How to fund a house flip in Utah.
General information, not legal, tax or financial advice. Every loan is subject to underwriting, and terms are provided in writing. Updated November 3, 2026.