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Fix and flip loans
A fix and flip loan is short-term money that covers both the purchase and the rehab of a property you plan to resell. Rate bands run about 10.5% to 13.5% plus 1 to 3 points, the term is 6 to 18 months, and the whole loan is sized off the after-repair value (ARV), not today's price. The deal only works if the resale comps hold.
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How a fix-and-flip loan is structured
1 · Purchase plus rehab
The lender funds up to about 90% of the purchase and most of the rehab, released in draws as work passes inspection.
2 · Sized off ARV
The total loan is capped near 70% of the after-repair value, the finished resale value rather than today’s price.
3 · Repay on resale
You pay interest only during the 6 to 18 month term, then retire the loan when the renovated home sells.
The flip math (the 70% rule)
The 70% rule reserves roughly 30% of ARV for profit, carrying costs, and fees. Worked example: a property with a $300,000 ARV and $50,000 of rehab pencils to a max offer of about $160,000 (0.70 × $300,000 = $210,000, minus $50,000). If the seller wants more than that, the margin is probably too thin to clear interest, points, and closing.
Thinking about holding instead of selling? Our cap rate calculator and the 1% rule sanity-check the buy-and-hold version of the same property when the flip margin looks tight.
How flip rates compare
Flip money is the most expensive of the three investor products because the lender is funding rehab risk on a short clock. If you plan to keep the property, a DSCR loan is far cheaper, so the choice of loan follows the exit, not the other way around.
| Loan | Rate band | Term | Best for |
|---|---|---|---|
| Fix & flip | 10.5% to 13.5% | 6 to 18 mo | Buy, renovate, resell |
| Hard money | 10% to 13% | 6 to 24 mo | Fast close on distressed buys |
| DSCR | 7% to 8.5% | 30 yr | Long-term hold, rent covers debt |
Rate bands are illustrative 2026 market estimates for display, not live lender quotes.
Common questions about flip loans
What is a fix and flip loan?
A short-term loan, usually 6 to 18 months, that funds both the purchase of a property and its renovation, repaid when you sell the finished home. It is sized off the after-repair value (ARV), not today’s price.
What are fix and flip loan rates?
Illustrative 2026 bands run about 10.5% to 13.5% interest plus 1 to 3 points. Lenders commonly fund 70 to 90% of purchase and most of the rehab, with the total capped near 70% of ARV.
How much can I borrow for a flip?
Most lenders fund up to about 90% of purchase and most of the rehab, as long as the total loan stays near 70% of ARV. The deal also has to show a profit margin after every cost, often in the 20 to 30% range.
Do I need experience to get a flip loan?
First-time flippers can qualify, but a track record earns better terms. Lenders usually want a scope of work, contractor bids, and comparable sales to back the ARV.
Related
Planning to keep the property instead of selling? A DSCR loan is the usual exit, and our market ranking scores 18 metros on buy-and-hold cash flow from live Zillow price and rent data. At today's roughly 6.8% 30-year rate, only 4 of those 18 metros clear the 1.20 DSCR most lenders require, Cleveland, Memphis, Birmingham, and Chicago. If your flip is in a pricier coastal or Sun Belt market, the rental exit usually will not pencil, so plan to sell rather than hold.