Private Money Loan Rates in California: What a Bridge Loan Actually Costs

Estimated reading time: 8 minutes

Most borrowers get a rate quote before they understand what sits behind it. Private money loan rates in California vary widely. However, the reason is rarely explained.

One lender quotes 9 percent. Another quotes 13. A third gives no number at all until you send a full package.

So here is a plain answer, with real figures. At Mayacamas Lending, private money loan rates typically run 8 to 11 percent. Origination adds 1 to 3 points. Loans range from $100,000 to $10 million. Terms run 12 to 24 months, most commonly 12. Most files fund in 7 to 10 business days.

Below, we break down what moves those numbers. In addition, we cover what else you will pay and which questions to ask before you accept a quote.

What are typical private money loan rates in California?

Across the California market, private money loan rates generally sit between 8 and 13 percent. Conservative lenders price at the bottom of that band. They work on low-leverage, first-position deals. Lenders taking more risk price above it.

Our own loans price between 8 and 11 percent. A first-position loan on a stabilized commercial building lands at the low end. Second-position loans, raw land, and ground-up construction price higher. The risk is genuinely higher, so the rate reflects it.

That range covers business-purpose lending secured by non-owner-occupied real estate. It does not apply to consumer loans or primary residences. We do not offer either one.

What drives private money loan rates up or down?

Five factors do most of the work. Understanding them helps you predict your quote before you call anyone.

Lien position. First position gets paid first in a sale or foreclosure. Second position sits behind an existing lender. As a result, it carries more risk and prices higher.

Leverage. Lower loan-to-value means a bigger equity cushion. That cushion protects the lender. Consequently, lower leverage earns a better rate.

Property type. Stabilized commercial and residential investment property price best. Land prices worst. It produces no income, and it sells slowly.

Exit strength. A signed listing agreement beats a plan. So does a refinance already in underwriting. Therefore, clear exits earn better pricing.

Borrower experience. A builder on their twelfth project carries less execution risk than a first-timer. That said, preparation can offset inexperience. We have funded first-time flippers who simply did the work.

How much are points on a private money loan?

Origination on our loans runs 1 to 3 points, paid at closing. One point equals one percent of the loan amount.

Smaller and shorter loans usually carry more points. The reason is simple. Underwriting a $200,000 loan takes nearly as much work as underwriting a $2 million loan. The fee does not scale down to match.

Across California, private money origination commonly runs 2 to 4 points. Some lenders charge more. Therefore, points deserve as much attention as the rate itself when you compare offers.

What other costs come with private money loan rates?

Your rate and points are not the whole picture. Beyond those, you pay third-party costs directly:

• Appraisal or broker price opinion
• Title and escrow fees
• Recording fees
• Construction fund control or draw administration, where it applies

These go to actual vendors. We do not mark them up. Moreover, we give you an estimate before you spend a dollar on any of them.

Servicing is not a separate charge on our loans. Instead, it sits as a small spread inside the interest rate. Your monthly payment therefore covers loan management with no surprise line items.

Watch for junk fees elsewhere in the market. Document preparation, processing, and administration fees can stack up on a closing statement. Together they may add a point or more to your real cost. So ask for a full fee schedule in writing before you commit.

What terms come with these rates?

Our loans are short-term and interest-only. A recorded deed of trust secures each one. Terms run 12 to 24 months, and 12 is the most common. Extensions are available on request, subject to approval.

Most of our loans carry a three-month minimum interest period. If you pay off inside that window, you still owe interest through month three. We tell you this at term sheet, not when you request a payoff demand. Private capital gets committed to your deal and priced for a term. That minimum period is what makes the commitment work on both sides.

Loan amounts run from $100,000 to $10 million. Leverage depends on the funding path. On loans we fund through our own private lender network, we go to 65 percent loan-to-value. When a deal needs more, we broker it to partner lenders. There, the right project can reach 90 percent. Raw land sits at 50 percent or below either way.

How fast can a loan at these rates fund?

Most loans fund in 7 to 10 business days from a complete package. That assumes we can close on a broker price opinion. A full appraisal adds roughly 7 days. A brokered deal adds 2 to 3 days for the partner lender’s review.

The sequence looks like this. Term sheet within 24 to 48 hours. Broker price opinion ordered the day you sign it. Title ordered in parallel, not after. Docs drawn once the valuation and preliminary title report arrive. Funding at recording.

Speed depends heavily on what you send on day one. Four items decide whether this takes eight days or three weeks. Those are entity documents, a rent roll or scope of work, insurance information, and payoff demands on existing liens.

Some things genuinely cannot be rushed. Clouded title will slow a file. So will an undisclosed lien, a slow payoff demand, or a property the appraiser cannot access. A suspended borrower entity will too. We flag those the day we see them.

How do these rates compare to bank financing?

A bank will almost always beat a private lender on rate. Banks also charge lower fees.

However, rate is not the only variable. Banks typically take 45 to 90 days to close. They underwrite your global financial picture rather than the property. In addition, they rarely lend on a property that needs significant work. They also move slowly on off-market opportunities.

Private money loan rates carry a premium for a reason. That premium buys speed, flexibility, and certainty. It is worth paying when a deal has a deadline. It is also worth paying for an asset a bank will not touch. It is not worth paying when you have 60 days and a clean, stabilized property.

If you are bankable, use a bank. We will tell you so, and we will often make the introduction. For a fuller comparison, read our breakdown of bridge loans versus hard money loans in California.

When do private money loan rates make financial sense?

Run the math on total cost, not on the rate alone.

Take a $500,000 loan at 10 percent for six months. Interest costs roughly $25,000. Add 2 points and you are near $35,000 all-in, before third-party costs.

Now weigh that against the alternative. Say the deal produces $150,000 in profit. Say no other capital could close it in time. The cost is easy to justify. But if the margin is $40,000, the loan eats most of it.

Private money works when the opportunity is larger than the cost of the capital. Additionally, it works when a short-term problem needs solving and a clear exit exists. It fails when a borrower uses it to stretch into a deal that never penciled.

We would rather talk you out of a thin deal than fund it. A loan that only works in a rising market is not a loan we want. For more on that, see when to use a bridge loan.

Questions to ask before you accept a rate quote

Use this list on every lender you speak with, including us.

1. Is the quoted rate fixed, or does it adjust?
2. How many points, and are they paid at closing or accrued?
3. Is there a prepayment penalty or minimum interest period?
4. What third-party costs will I pay, and are any marked up?
5. Are there document, processing, or administration fees?
6. Are you funding this directly, or brokering it?
7. What is the real timeline, and what could extend it?
8. What is your license number?

That last question matters more than most borrowers realize. California private lenders operate under a DRE or NMLS license. You can verify either one in about a minute through the California DRE public license lookup. Mayacamas Lending holds DRE license #02306252.

If a lender hesitates on any of these eight questions, that hesitation is your answer.

Working with Mayacamas Lending

We are a California licensed brokerage based in Santa Rosa. We lend across Sonoma County and Northern California. We originate, underwrite, and service every loan that carries our name.

Our approach rests on three commitments. First, we protect principal and structure loans to survive a bad market rather than a good one. Second, we tell the full story, including what can go wrong. Third, we only proceed where your incentives and ours line up.

Our borrower and lender FAQ covers collateral, timelines, and process in more detail. If you have a project, tell us about it. We will give you a straight answer quickly, even when that answer is no.

Mayacamas Lending Inc. is a Real Estate Broker – California Department of Real Estate. DRE License #02306252. Loans are made or arranged pursuant to this license.

Rates, points, and terms described here are ranges, not offers. All lending is subject to underwriting, appraisal, and market conditions. Mayacamas Lending Inc. makes business-purpose loans secured by non-owner-occupied California real estate. We do not offer consumer loans.