How Many Points Do Hard Money Lenders Charge? What Filings Show
Public hard money lenders disclose points of 0% to 2% and 1% to 3% of the loan amount. Here is what a point is, when it is paid and how lenders earn.
Why it matters
- Manhattan Bridge Capital says it usually receives points of 0% to 2% of a loan's original principal, according to its 10-Q filed Oct. 21. Sachem Capital's 2025 annual report puts its origination fees at 1% to 3%.
- One point is 1% of the loan amount. On a $400,000 loan, 2 points is $8,000, usually collected at closing, with more points often charged when a loan is extended.
- Points are a real share of a lender's revenue. Origination fees were about 19% of Manhattan Bridge's third-quarter revenue; interest made up the rest.
Explainer: background on how this part of the market works.
Hard money lenders that file with the SEC disclose points of about 0% to 3% of the loan amount. Manhattan Bridge Capital says it usually receives "origination fees or 'points' ranging from 0% to 2% of the original principal amount of the loan," according to its quarterly report filed Oct. 21. Sachem Capital's annual report for 2025 says its origination fees "generally" range "from 1% to 3%."
Those are two lenders' own disclosures, not a survey of the market. We did not find a public survey or regulator dataset of hard money points that we could open and check. Nothing here is a quote, an offer or advice.
How many points do hard money lenders charge?
The public filings we reviewed show 0 to 3 points, with each lender disclosing its own band.
| Lender | Points disclosed | Note rate disclosed | Source |
|---|---|---|---|
| Manhattan Bridge Capital | 0% to 2% of original principal, plus underwriting and funding fees | Fixed 9% to 12% a year, terms up to 12 months | 10-Q, quarter ended Sept. 30, 2026 |
| Sachem Capital | 1% to 3% generally, plus extension points | Fixed, typically 10.0% to 13.0% a year, terms of one to three years | 10-K for 2025, filed March 13, 2026 |
| Velocity Financial | No points range disclosed in the filing we reviewed | 10.4% weighted average coupon on 2025 loans held for investment | 10-K for 2025, filed March 12, 2026 |
Velocity reported $34.0 million of origination fee income in 2025 on $2.72 billion of loans originated. That works out to about 1.25% of loan volume, by The Lender Market's calculation. It is a rough ratio, not a disclosed points rate, and Velocity lends mainly on rental and small commercial properties rather than short-term flips.
What the filings do not show: the points charged by the thousands of private lenders that do not file with the SEC, how points vary by deal size or borrower, or a market average. For current note rates, see our page on hard money and private lending rates today.
What is a point?
A point is 1% of the loan amount. "One point equals one percent of the loan amount," the Consumer Financial Protection Bureau says, so one point on a $100,000 loan is $1,000.
On a home mortgage, the CFPB uses "points" for discount points, which buy a lower rate. On a hard money loan, points are usually an origination fee: Manhattan Bridge uses "origination fees or 'points'" as one term. The CFPB notes that some lenders call any upfront fee figured as a percentage of the loan "points."
When are points paid?
Usually at closing. The CFPB says points "are paid at closing and are added to your closing costs." Points can come due again later. Sachem says "if the term of the loan is extended, additional points are payable upon the extension," and Manhattan Bridge says that when it renews or extends a loan, "we generally receive additional 'points' and other fees."
Both lenders record the fees over time. Manhattan Bridge says deferred origination fees "are amortized over the term of the respective loan."
How do points and the note rate make up a lender's revenue?
A lender earns two ways on each loan: points up front and interest over the term. In the third quarter, Manhattan Bridge's origination fees were about $392,000 of its $2.05 million in revenue, or about 19%, up from $265,000 a year earlier. Interest income was about $1.66 million. In 2025, Sachem earned $32.2 million of interest income from loans and $3.3 million of origination and modification fees.
Points matter more on short loans. Take a hypothetical $400,000 loan at 10% with 2 points. Points are $8,000. If it runs 12 months, interest is $40,000. If it pays off in six months, interest is $20,000, and the same $8,000 in points is close to 29% of the lender's revenue on that loan. (Illustrative figures.)
How does the lender earn when someone else funds the loan?
That depends on the funding. Under direct capital placement, a capital provider funds specific loans the lender submits, deal by deal. The lender does not give up the loan's interest income. It sets the borrower's note rate, the capital partner receives its agreed return, and the lender keeps the difference plus its points.
Hypothetical: a $400,000, 12-month loan at a 12% note rate with 2 points, funded by a capital partner whose agreed return is 10%. The borrower pays $8,000 in points and $48,000 in interest. The capital partner receives $40,000. The lender keeps the $8,000 spread plus the $8,000 in points, or $16,000. (Illustrative figures, not any provider's terms.)
| Funding option | Where the money comes from | How the lender earns |
|---|---|---|
| Balance sheet | The lender's own equity | Points and fees, plus all of the interest |
| Warehouse or bank credit line | A bank lends against the lender's loans | Points and fees, plus loan interest minus the line's cost on the borrowed portion |
| Private fund | Investors' equity or notes | Points and fees, plus the gap between loan rates and what the fund pays investors |
| Whole loan sale | A buyer purchases the loan | Points and fees, plus any premium; future interest goes to the buyer |
| Direct capital placement | A capital partner funds the loan, deal by deal | Points and fees, plus the spread between the note rate and the partner's agreed return |
Our warehouse line of credit guide explains how bank lines are priced, and our guide to alternatives to a warehouse line covers each option in more depth.
Frequently asked questions
Are 2 points a lot on a hard money loan?
It sits inside both public bands we found: Manhattan Bridge's 0% to 2% and Sachem's 1% to 3%. We found no sourced market average to compare it with.
Do points lower the rate on a hard money loan?
Not necessarily. Discount points on a home mortgage lower the rate, the CFPB says. The hard money filings we reviewed describe points as origination fees and do not say they buy down the rate.
Can points be charged again?
Yes. Both Sachem and Manhattan Bridge say they generally charge more points when a loan is extended or renewed.
Sources
- Manhattan Bridge Capital, Form 10-Q for the quarter ended Sept. 30, 2026 (filed Oct. 21, 2026)
- Sachem Capital, Form 10-K for 2025 (filed March 13, 2026)
- Sachem Capital, Form 10-Q for the quarter ended June 30, 2026 (filed Aug. 5, 2026)
- Velocity Financial, Form 10-K for 2025 (filed March 12, 2026)
- Consumer Financial Protection Bureau, What are (discount) points and lender credits and how do they work?
- The Velocity fee ratio and all loan examples, including the direct capital placement hypothetical, are calculations by The Lender Market. Terms vary by lender and deal.
