Do you want to be profitable on your fix and flip deal?
To make a profit, you must understand the real cost of the money you borrow.
It is not only the interest rate that matters. Your total cost also depends on points, fees, the market, your own track record, execution timeline, and the strength of the collateral.
Market Shift in 2025–2026 Fix and Flip Rates
In a recent discussion between Wesley Carpenter of Stormfield Capital and Rocky Butani of Lender Link, Wesley described 2025 as a transition year for real estate investors.
In this discussion titled “Inside Stormfield Capital: Real Estate Bridge Lending Strategy & Market Outlook”, Wesley notes that the Federal Reserve’s first rate cut brought cautious optimism. Even with wider market challenges, private lenders saw more deals and steady demand.
Heading into 2026, the outlook remains cautiously optimistic. Data from thousands of transactions shows that average bridge loan rates steadily declined over the prior year. Average bridge loan rates fell from 11.1% in September 2024 to 10.43% in September 2025.
For 2026, rates are expected to remain stable, with potential modest downward movement if inflation stays contained.
For more on short-term project financing, explore our dedicated Fix & Flip Loans page.
Average Fix & Flip Loan Rates (2026)
Fix-and-flip loans fall under the umbrella of Residential Transition Loans (RTLs). The RTLs finance rehab and ground-up construction projects. Since these are short-term, business-purpose loans, their interest rates are higher than agency mortgages. Private mortgage rates typically range from 9% to 12%.
As capital markets stabilize and competition rises, expect strong lenders to offer competitive starting rates. Some disciplined institutional lenders offer starting rates as low as 9.99%. However, most borrowers should expect rates closer to the average, which was around 10.43% as of late 2025.
What Impacts Fix and Flip Loan Pricing
Your final fix-and-flip interest rates are determined not only by prevailing market averages but primarily by the lender’s underwriting assessment of the borrower’s risk.
Credit
Lenders require strong liquidity and adequate reserves. Requiring a minimum available liquidity is standard. Borrowers must show sufficient reserves to obtain approval, and credit strength matters too. Higher FICO scores typically earn better pricing, while lower scores can lead to higher rates or added reserve requirements.
Experience
Experience is valued, and seasoned operators are generally preferred. Lenders prefer borrowers who can document prior flips, such as completing at least one flip in the last 36 months.
However, some disciplined platforms accept new investors. The new investors must present a strong plan, have a robust FICO score, and meet liquidity requirements.
LTV/LTC
Loan-to-Value (LTV) and Loan-to-Cost (LTC) ratios represent the required borrower equity, or “skin in the game.”
Reputable lenders typically avoid “zero-down” deals. They usually offer the following:
- Residential transition loans (RTLs) with leverage up to 90% LTC or 70% LTARV (After Repair Value).
- Some aggressive competitors may rarely offer higher leverage.
Market Volatility
Private mortgage lending uses short-term loans, usually around 12 months. Data shows that the rates private lenders charge do not closely follow short-term market benchmarks like SOFR or the U.S. 2-Year Treasury.
However, interest rates still affect real estate values over time. If interest rates remain high, property values may drop. Lenders protect themselves by keeping loans short-term, which allows them to update the Loan-to-Value (LTV) ratio as each loan matures.
When property values fall, the “V” in LTV goes down. To stay within safe limits, lenders may raise interest rates to offset this increased risk.
These tiers have remained stable, giving flippers a clear sense of timing, risk, and reward.
Points and Fees
The true fix and flip loan cost includes both the interest rate and the associated closing costs (points and fees).
- Origination Fees (Points): These are paid at closing and are expressed as a percentage of the total loan amount. An origination fee of 1 point implies 1.00% of the total loan amount.
- Up-Front Fees: In addition to origination points, borrowers incur processing, servicing, and legal fees. Some lenders ensure transparency by reducing the standard up-front fees to a fixed amount. In such cases, the borrower is responsible for paying third-party reports (e.g., appraisal) directly.
- Other Costs: These may include estimated legal costs, loan processing and servicing fees, and per-diem interest covering the period from closing to the end of the month.
You can try out Stormfield Capital’s digital platform to transparently view the fix-and-flip loan cost. (CTA to Get Instantly Qualified)
Cost Breakdown for a Project: Time and Points are the Real Drivers
Let us discuss a scenario to understand how Time and Points matter. Consider the cost for a sample fix-and-flip loan for a single-family home in Connecticut.
Project Background:
- The borrower is purchasing a property for $450,000
- An estimated ARV of $650,000.
- The Total Loan Amount is $455,000
- $375,000 funded at the time of purchase
- $80,000 held in reserve to fund rehab
- The loan term is 12 months, interest-only, at 10.99%.
This loan has the following additional details:
| Detail | Amount / Range | Component Type |
|---|---|---|
| Total Loan Amount | $455,000 | Principal |
| Interest Rate | 10.99% | Variable Cost (Time Dependent) |
| Fully Drawn Monthly Payment (Interest Only) | $4,167.04 | Based on the full $455k draw |
| Origination Fee (1.00%) | $4,550 | Fixed Upfront Cost (Points) |
| Loan Processing & Servicing Fees | $1,695 | Fixed Upfront Fees |
| Est. Legal Costs | $1,900 | Fixed Upfront Fees |
| Cash Required at Closing | $83,259 | Borrower Equity / Liquidity |
Total Cost is Driven by Duration
Let us appreciate how the duration drives the total cost.
For that, let us break the cost into its components:
Basement Modernization
| Cost Component | Calculation (12 Months) | Cost |
|---|---|---|
| Fixed Upfront Costs | Origination Fee + Other Fees | $8,145 |
| Variable Interest Costs | $4,167.04/month * 12 months (Assuming full draw average) | $50,004.48 |
| Total Lending Cost (12 Months) | Sum of Fixed and Variable Costs | $58,149.48 |
Notice that the total cost includes the fixed upfront costs plus the variable interest costs. The interest costs depend on the duration.
Scenario Analysis: How Small Changes Increase Costs
Scenario 1: What if the Loan Duration Extends by Two Months?
Let us see what happens when a project is delayed. Consider the case where a delay forces the investor to hold the loan for 14 months instead of the planned 12 months:
- Impact: Adding 2 months of interest payments at the fully drawn rate of $4,167.04 per month results in an additional $8,334.08 in interest costs.
- Time is money: This $8,334 is coming from your profits!
Scenario 2: What if Origination Points Increase from 1 to 3?
Consider another case. You were offered slightly lower interest rates but at higher points. If the fixed, upfront origination points charged on this $455,000 loan increased from 1 to 3, the upfront cost increases from $4,550 to $13,650. The increase would be $9,100
Points significantly affect the overall cost. They are a fixed, upfront cost that must be paid at closing. Borrowers should understand how points impact their bottom line.
See which loan actually fits your flip.
Flipping succeeds when money flows at the same pace as the work. A structured fix & flip loan keeps your project moving, while generic hard money often slows it down.
Stormfield Capital transparently provides the Loan Details.
Access the digital platform to prequalify and get the details today.
How to Get Lower Rates for a Fix and Flip loan?
Based on our experience of handling hundreds of deals, we can confidently share this.
To secure the best fix and flip loan rates, you must maximize your strength across the risk factors lenders evaluate:
- Demonstrate Strong Liquidity and Collateral: Adequate reserves are required for loan approval. When the underlying collateral is strong, a lender may make case-by-case exceptions to credit or liquidity requirements.
- Be an Experienced, Repeat Customer: Lenders prefer repeat customers in all transactions. Strong prior experience often improves loan terms and leverage levels.
Choose Lenders with Balance-Sheet Stability: Lenders that operate with stable, long-term capital are better positioned to offer certainty of execution. This stability enables faster, more reliable closings, often within 7 to 9 business days.
Table of Contents
Stormfield Capital is a direct balance-sheet lender offering financing solutions for residential investment projects, including fix and flip, bridge, and new construction loans. With fast decisions, consistent draw processes, and reliable funding, Stormfield supports investors across the Northeast and other key U.S. markets.
If you’re evaluating financing for an upcoming flip, Stormfield’s team can help you compare your options and understand the best structure for your project. Contact us to discuss your deal or get a quick quote.
Fix and Flip Loan FAQs
1 What is a Residential Transition Loan (RTL)?
RTL is a term used to describe loans that finance transitions in residential property. This type of loan includes fix & flip purchases and rehab, refinance & rehab on owned properties, and single-family residence ground-up construction projects.
2Can first-time investors get a fix-and-flip loan?
Yes, first-time flippers can secure loans. While seasoned operators are preferred, lenders also accept new investors. The lenders should have a strong plan and meet liquidity requirements.
3How does the servicing model affect the costs?
The servicing model can significantly impact borrower cost. Lenders using an in-house servicing model hold the loan through maturity, offering high continuity and ongoing support.
In contrast, some competitors often sell or transfer loans immediately after closing. This can lead to common complaints about poor servicing, delays in accessing holdback funds (draws), and a lack of communication.
Any delay leads to increased costs.
4 Why are points so important if the interest rate looks competitive?
Points are upfront, fixed costs that affect your total loan cost.
Even a small increase in points on a $400k–$800k loan can add thousands of dollars to closing costs. Borrowers should always evaluate the total cost (rate + points + fees), not just the interest rate.
