Private Money Lending Rates: What to Expect in 2026

Published August 2, 2026 | By gilbsy123

Infographic showing private money lending rates for 2026 with three gold and white bar graphs labeled 8%, 10%, and 12%, each topped with a house icon on a dark teal background. One of the first questions real estate investors ask about private money is: “How much does it cost?” Understanding private money lending rates helps you accurately analyze deals and negotiate better terms. Here’s a complete breakdown.

What Are Typical Private Money Lending Rates?

In 2026, private money lending rates typically range from 8% to 13% annually, depending on:

The lender’s risk tolerance and relationship with the borrower
The property type and condition
The loan-to-value ratio (LTV)
The loan term and exit strategy
The borrower’s track record

Interest Rate Breakdown by Property Type

Fix-and-Flip (residential): 9–12%
BRRRR Rentals: 9–11%
Commercial Bridge: 10–13%
Land Loans: 10–14%
New Construction: 10–13%

What Are “Points” in Private Lending?

Points are origination fees charged upfront. One point = 1% of the loan amount. Private lenders typically charge 1–3 points. On a $200,000 loan at 2 points, you’d pay $4,000 at closing.

How LTV Affects Your Rate

The lower your LTV, the lower your rate. A 60% LTV loan carries less risk than an 80% LTV loan—lenders reward less risk with lower rates. Most private lenders cap LTV at 70–75%.

How Borrower Track Record Affects Rate

First-time borrowers typically pay higher rates (10–12%). Repeat borrowers with a proven track record often negotiate down to 8–9%. Your credibility has real monetary value.

Comparing Private Money to Hard Money

Hard money lenders typically charge 11–14% with 2–4 points. Private individual lenders often charge 8–10% with 1–2 points. Over a 12-month, $200,000 loan, that difference is $6,000–$8,000 in savings.

How to Negotiate Better Rates

Bring a strong deal with conservative numbers
Show your track record and references
Offer a lower LTV (more equity cushion for the lender)
Offer a personal guarantee
Start with one solid deal and build the relationship

Are Private Money Rates Worth It?

Yes—when the deal math works. If you’re buying a property at $0.70 on the dollar with strong ARV, the 10% interest rate is a cost of doing business, not a dealbreaker.

Want to learn how to structure a deal around these rates? Read how to structure a private money lending deal and how to analyze a fix-and-flip deal.