Fix and Flip Loans: Rates, Terms, and Best Lenders

If you buy a rundown property, renovate it, and sell it for a profit within a year, a conventional mortgage is the wrong tool. Banks price 30-year loans for people who plan to live somewhere, not for investors who want to be in and out in six months. That gap is exactly what fix and flip loans fill.

This guide explains how fix and flip loans work, what rates and terms are realistic in 2026, and who actually lends the money.

How Do Fix and Flip Loans Work?

A fix and flip loan is short-term financing for buying and renovating a property you intend to resell quickly. Instead of underwriting your income over decades, the lender underwrites the deal: the purchase price, the renovation budget, and the projected value after the work is done.

That last number is the key. Lenders call it the After-Repair Value (ARV) - an appraised estimate of what the finished property will sell for. Most of the loan math flows from it.

Three ratios drive almost every fix and flip financing decision:

Loan-to-Value (LTV): Lenders typically cap the loan at around 70-75% of the ARV. Some go higher (up to 80%) on strong deals, according to lender comparisons compiled by LYNK Mortgage.
Loan-to-Cost (LTC): This measures the loan against your total project cost - purchase plus rehab. Top lenders advertise 90-95% LTC, meaning you cover only 5-10% of costs out of pocket.
The lower of the two: Lenders usually fund the smaller of the ARV-based cap and the LTC-based cap, so there's always a safety margin if the flip underperforms.

Renovation money is normally held back and released in draws as work is completed and inspected, not handed over on day one. Critically, on most loans you only pay interest on the funds actually drawn - RCN Capital, for example, charges interest on the outstanding balance rather than the full rehab holdback. That keeps your carrying cost down early in the project.

The loan is designed to be repaid in one shot - when you sell the property, or when you refinance into a longer-term rental loan if you decide to hold it.

Fix and Flip Loan Rates in 2026

Fix and flip loans cost more than conventional mortgages because they're faster, more flexible, and riskier for the lender. Two numbers matter: the interest rate and the origination points.

Interest rates in 2026 generally run from about 9% to 13%, with the strongest borrowers on the best deals seeing quoted floors well below that range - as low as 7.25% for repeat flippers with a documented track record, per Fit Small Business.

Origination points typically add 1.5 to 3 points (1.5%-3% of the loan) upfront. On a $300,000 loan, two points is $6,000 due at closing.

A few things worth knowing about how rates are set:

Advertised "starting rates" reflect best-case pricing - top credit, multiple completed flips, strong market. Your first flip will price higher.
Most loans are interest-only for the term, which keeps monthly payments manageable while you're renovating.
Extensions cost extra, usually 1-2% of the loan per extension if you blow past your deadline.

Because points, rates, and holdback rules vary so much, run the total carrying cost before you commit. A business loan calculator helps you model the full cost across the loan term, not just the headline rate.

Typical Terms and Requirements

Fix and flip financing is short by design. Most loans run 6 to 18 months, with 12 months being the standard, according to lender data summarized by Stormfield Capital. The clock matters: every extra month is interest you're paying out of your eventual profit.

Common requirements include:

Credit score: Most lenders want a minimum FICO of roughly 620-660. Many prefer 660+, though some go lower if the deal itself is strong.
Down payment / skin in the game: Even at 90% LTC, you'll bring cash for your share of costs plus closing fees, points, and a reserve buffer.
Experience: First-timers can get funded, but repeat flippers get better rates and higher leverage.
The deal: A credible ARV, a realistic rehab budget, and a property in a market with liquid demand.

Because underwriting leans on the asset rather than your personal income, approval and funding are fast - often days, not weeks. That speed is the whole point when you're competing for distressed properties.

Who Offers Fix and Flip Loans?

These loans come almost entirely from specialized private and "hard money" lenders, not traditional retail banks. Names that consistently appear in 2026 lender comparisons include:

Kiavi - a tech-driven lender offering up to 90% LTC, with rates set by a model weighing 20+ inputs.
Lima One Capital - advertises up to 95% LTC with low starting rates for experienced flippers.
RCN Capital - nationwide lender with published 2026 rate floors and interest charged only on the drawn balance.

Beyond these, you'll find regional hard money lenders and private-capital funds that often move faster and negotiate more flexibly on local deals. Always verify current terms directly with the lender - published rates change frequently and are quoted for ideal borrowers.

Are There Alternatives to a Fix and Flip Loan?

If a dedicated flip loan doesn't fit - say you flip occasionally alongside another business, or you want reusable capital - consider these:

A business line of credit gives you revolving funds you can draw on for smaller rehabs or to cover the gaps between draws.
Broader financing options are worth comparing before you specialize; our roundup of the best small business loans covers term loans and other products that some investors use for lighter renovation work.

The right choice depends on volume. If flipping is the business, a purpose-built fix and flip loan almost always wins on leverage and speed. If it's a side play, more flexible general-purpose financing may serve you better.

Bottom Line

Fix and flip loans work by lending against a property's after-repair value, funding most of your purchase and rehab, releasing renovation money in draws, and getting repaid when you sell - usually within 12 months. Expect rates around 9%-13% plus 1.5-3 points, and expect the lender to be a specialized private firm rather than your local bank. The math only works if your ARV is honest, your budget holds, and you sell before the term runs out.

Run the numbers on your next deal before you sign - model the full carrying cost with our business loan calculator so the interest doesn't quietly eat your margin.

Rates and lender terms cited reflect 2026 figures published by the sources linked above and are subject to change. Verify current pricing directly with any lender before financing a deal.