Enter the amount financed, APR and term from the loan document, then the cash price for the same roof. The tool solves the rate you are really paying.
+4.19 ptseffective over stated, at a 15% price gapHyreRoof calculation on an example: $15,000 financed at a stated 11.86% over ten years, against a $12,750 cash price, is a 16.05% loan. The 15% gap is a test value, not a measured roofing markup.
A roof loan costs more than its stated APR whenever the financed price is higher than the cash price for the same roof. The APR is computed on the amount financed, so a markup inside the price never shows in it.
For example, $15,000 at 11.86% over ten years against a $12,750 cash price is a 16.05% loan.
Ask for the cash price in writing. Without it, nobody can measure what the financing costs.
Solve the rate against the cash price
Enter what the loan document says, then the cash price for the identical roof. Nothing is sent anywhere.
Arithmetic on your figures, not a quote, a finance offer or legal, insurance or tax advice. HyreRoof does not sell roofs, broker loans or take a referral fee.
How to read the two rates
Both numbers are true; they measure different things. The stated APR is computed under Regulation Z on the amount financed. The effective APR here is computed on the cash price. The difference is the price of the financing, as a rate.
A low headline rate has to be paid for by someone. In a contractor-arranged loan, one way is a payment from the contractor to the lender that comes back in the contract price. Ask whether the cash price is the same number.
The question is not “is my loan bad.” It is “what would this roof cost in cash, and have I seen that number?” With the cash price you can compare quotes like for like and shop the loan separately.
Three bands, and what to do in each
Gap between effective and stated APR
What it can mean
What to do about it
Under 1 point
Either there is genuinely little markup, or you entered a cash price you were given rather than one you inferred.
Confirm the cash price is for the identical scope. Then compare the stated rate against the alternative row and pick on rate alone.
1 to 4 points
The ordinary consequence of a mid-sized markup sitting inside the price. Not evidence of anything improper.
Worth knowing before signing. Ask whether buying at the cash price with your own lender is cheaper: the comparison row does that arithmetic.
Above 4 points
The financing is a substantial part of what you are buying, not an accessory to it.
Get a second quote priced in cash and shop the loan independently, credit union, home equity, or your own bank. See the equity section below for what you give up in exchange for a better rate.
HyreRoof interpretation, not a regulator’s classification. The band boundaries are editorial and published here so you can disagree with them.
None of these bands is an accusation. A markup inside a price is lawful in ordinary circumstances and the stated APR that excludes it is generally computed correctly. The bands describe how much the financing is costing you, which is a separate question from whether anyone did anything wrong.
Every input, and where you find it
1
Amount financed
The principal the lender is actually lending, not the contract price, not the total of payments. Where: the Truth in Lending box on the loan document, labelled "Amount Financed". It sits on the same page as the APR.
2
Cash price for the identical roof
The point of the tool. Leave it at 0 if you were not given one; the tool will not guess. Where: ask the contractor in writing for the same scope with no financing.
3
Stated APR
The annual percentage rate printed on the loan document. Use the APR, not the interest rate, if the paperwork shows both. The tool does not second-guess it. Where: the TILA disclosure box labelled "Annual Percentage Rate".
4
Term in years
How long the loan runs. The term moves the effective rate a lot. Where: the loan agreement, often as a number of monthly payments; divide by 12.
5
Your alternative rate
What you could borrow the cash price at yourself. Where: your credit union, bank or HELOC. Set 0 for a cash purchase. The default is the Federal Reserve G.19 personal-loan benchmark, a national average, not an offer.
Optional. It changes no arithmetic; it switches on a warning about state deductible rules. Where: your declarations page, wind-and-hail line.
7
Read the gap and the verdict together
The gap is what the financing costs as a rate. The verdict says whether borrowing the cash price yourself costs less in total dollars. When they disagree, the verdict is the one about money.
The formula that runs
payment = P × r ÷ (1 − (1 + r)−n), where P is the amount financed, r the stated APR ÷ 12 and n the term in months. Where the stated APR is zero, payment = P ÷ n.
markup = P − cash. Where no cash price is entered, cash = P and the markup is zero by construction.
The effective APR is the monthly rate i solving cash = payment × (1 − (1 + i)−n) ÷ i, found by bisection over 200 iterations and reported as i × 12. Two hundred iterations is exact well past the two decimal places printed.
The comparison row is the same amortization formula applied to cash at your alternative rate over the same n. The verdict compares payment × n against altPayment × n and reports the difference in dollars.
This is the formula the calculator above runs, not a simplified description of it. If the two ever disagree, the published formula is the bug report.
A worked example: the 0% offer that is not 0%, and is still the better deal
A hail-damaged roof, replaced on a contractor-arranged plan advertised as "0% for 60 months". The homeowner asked for the cash price in writing and got one, which is the only reason any of the following can be computed.
Line
Figure
Amount financed
$15,000
Cash price for the identical scope, in writing
$12,750
Stated APR
0.00%
Term
5 years, 60 payments
Alternative rate available to this homeowner
8.50% home equity line
Markup inside the price
$2,250 (15.0% of the amount financed)
Monthly payment on the contractor plan
$250/mo
Effective APR against the cash price
6.59%
Paid above the cash price over the term
$2,250
Payment borrowing $12,750 at 8.50% instead
$262/mo
Interest paid on that alternative
$2,945
Verdict
Contractor plan: $695 cheaper
Every figure computed by the calculator on this page at those inputs. Recomputed September 5, 2026.
Read this example carefully, because it is the one that matters. The 0% offer is not 0% (it is 6.59% once the markup is counted) and it is still the cheaper of the two options available to this homeowner.
HyreRoof analysis: the value of knowing the cash price is not that it lets you reject financing. It is that it lets you decide. Had the alternative been a 5% credit union loan, the same contract would have lost.
One input changed at a time
Base case: $15,000 financed at a stated 11.86% over ten years, against a $12,750 cash price: a 15% gap, with a 11.86% alternative. Every figure below is produced by running the calculator on this page, not written by hand.
Change
Markup
Payment
Effective APR
Gap
Verdict against borrowing it yourself
Base case $15,000, 11.86%, 10 yr, $12,750 cash
$2,250 (15.0%)
$214/mo
16.05%
+4.19 pts
Borrow it yourself: $3,852 cheaper
No cash price entered
$0
$214/mo
11.86%
+0.00 pts
Type the cash price for the same roof
Cash price $14,250: a 5% gap
$750 (5.0%)
$214/mo
13.15%
+1.29 pts
Borrow it yourself: $1,284 cheaper
Cash price $13,500: a 10% gap
$1,500 (10.0%)
$214/mo
14.54%
+2.68 pts
Borrow it yourself: $2,568 cheaper
Cash price $12,000: a 20% gap
$3,000 (20.0%)
$214/mo
17.71%
+5.85 pts
Borrow it yourself: $5,136 cheaper
Cash price $11,250: a 25% gap
$3,750 (25.0%)
$214/mo
19.54%
+7.68 pts
Borrow it yourself: $6,420 cheaper
Cash price $10,500: a 30% gap
$4,500 (30.0%)
$214/mo
21.57%
+9.71 pts
Borrow it yourself: $7,704 cheaper
Stated 0.00% instead of 11.86%
$2,250 (15.0%)
$125/mo
3.32%
+3.32 pts
Contractor plan: $6,827 cheaper
Stated 4.99% instead of 11.86%
$2,250 (15.0%)
$159/mo
8.64%
+3.65 pts
Contractor plan: $2,744 cheaper
Term 5 years instead of 10
$2,250 (15.0%)
$333/mo
19.27%
+7.41 pts
Borrow it yourself: $2,993 cheaper
Term 15 years instead of 10
$2,250 (15.0%)
$179/mo
15.03%
+3.17 pts
Borrow it yourself: $4,824 cheaper
Term 20 years instead of 10
$2,250 (15.0%)
$164/mo
14.55%
+2.69 pts
Borrow it yourself: $5,893 cheaper
Alternative rate 8.00%: a home equity line
$2,250 (15.0%)
$214/mo
16.05%
+4.19 pts
Borrow it yourself: $7,116 cheaper
Alternative rate 20.94%: a credit card
$2,250 (15.0%)
$214/mo
16.05%
+4.19 pts
Contractor plan: $4,849 cheaper
0% over 5 years with a 25% gap
$3,750 (25.0%)
$250/mo
11.96%
+11.96 pts
Borrow it yourself: $33 cheaper
HyreRoof calculation. Every row is an output of the engine behind the calculator above, recomputed September 5, 2026.
Two rows deserve a second look. The 5-year row shows a shorter term producing a higher effective rate, 19.27% against 16.05%, because the same fixed markup is recovered over fewer payments. It is still cheaper in total dollars.
And the last row is the cleanest statement of the whole page: a 0% offer over five years, carrying a 25% price gap, is an 11.96% loan, which is almost exactly the national personal-loan rate. The advertised zero bought nothing at all.
The real ways people get this wrong
Comparing one financed price against another financed price
Two quotes carrying different, undisclosed markups are not comparable however carefully you line up the monthly payments. You would be comparing financing products while believing you were comparing roofs.
Entering the total of payments as the amount financed
Different TILA boxes, and the difference between them is the interest. Using the total of payments produces a nonsense markup and a meaningless rate.
Treating a guessed cash price as a measurement
If you guessed the cash price, the effective APR is a hypothesis. Useful for seeing how much the answer depends on it; not a finding to negotiate with.
Assuming the shorter loan is always better
In total dollars it is. As an effective rate against a fixed markup it is worse, because the markup is recovered over fewer payments. Both are true at once and the scenario table shows them side by side.
Financing the contract price when a settlement is coming
On an insurance job, borrow the shortfall. Financing the whole price and then getting a settlement check leaves you over-borrowed.
Signing the financing before the adjuster has scoped the loss
The Texas department’s storm guidance is to make only temporary repairs and not permanent ones until the claim is settled. Financing signed on the day of the sales call does not wait for that.
Asking for the cash price in writing, first
It makes every calculation on this page possible, and it costs nothing.
What this model ignores
The markup is derived from your cash price, not measured by us
HyreRoof holds no dataset of roofing quotes, loans, dealer fees or settlements. If your cash price is wrong or covers a different scope, every output is wrong with it.
Promotional and deferred-interest structures
A rate that steps up, or a structure that backdates interest if any balance survives a promotional period, is a different loan. This model runs one flat rate for the whole term.
Charges outside the price gap
Origination, documentation, filing and prepayment charges are not modeled. Neither are variable rates.
Insurance proceeds and their timing
Recoverable depreciation paid eighteen months into a five-year loan changes the real cash-flow path. The model does not attempt it.
Whether the roof needs replacing at all
Entirely outside this tool. That question belongs to an inspection, and to the repair-versus-replace test.
It is arithmetic, not advice
Not a quote, not a finance offer, and not legal, insurance or tax advice. Whether a particular disclosure complied with Regulation Z, or a particular deductible arrangement complied with your state’s law, is a question for a lawyer or your state regulator.
The fee is documented in solar. It is not documented in roofing.
The dealer fee is the most important thing on this page, so it goes first: we can show you a federal regulator describing this mechanism in detail, and that regulator was describing solar loans, not roofs.
HyreRoof calculation. Effective APR on a $15,000 amount financed at a stated 11.86% over ten years, as the cash price falls away from the financed price. At a 15% gap the 11.86% contract is a 16.05% loan.Computed by the calculator on this page. The 11.86% stated rate is the Federal Reserve G.19 personal-loan benchmark, not a roofing quote.
Source fact. In its Issue Spotlight: Solar Financing (August 7, 2024), the CFPB described lenders that “frequently bake these fees into a loan’s principal without including them in the stated annual percentage rate (APR),” adding that such fees “often increase the loan cost by 30% or more above the cash price of a solar project.”
Both quotations are about residential solar lending.
What we will not do. Restate that 30% as a roofing figure, headline it, or use it as a default. It was measured in a different trade, with a different sales channel, ticket size and tax-credit structure.
HyreRoof analysis, not a finding. What carries over is the structure: a
contractor who arranges the loan, a lender who pays for the introduction or a low advertised
rate, and a price quoted as a monthly payment.
Roofing shares all three features, and a roof sale can also happen at the door, under time
pressure, after a storm. Whether roofing markups look like solar’s is an open question, and we
do not know the answer.
What follows from not knowing. It is why this calculator has no dealer-fee
percentage input. Asking you to guess a fee, and then reporting the consequences of your guess
to two decimal places, would dress an assumption as a measurement.
Instead it asks for the one number that settles the question: the cash price for the
identical roof, in writing.
If the two prices are the same, there is no markup and the
stated APR is the real one.
If they differ, the difference is the price of the financing and the
calculator converts it into a rate.
The bars are a sensitivity ladder. They tell you how much the answer depends on a number your quote may not disclose. They do not tell you what that number typically is, because nobody has published it for roofing.
If the roof is an insurance claim, financing is the second question
When a roof is replaced after a covered storm loss, the policy pays part of it. That changes what you are financing, and some states have rules about the offers you may be shown.
On a claim, you finance the gap, not the roof
On a replacement-cost policy the insurer pays to “repair or replace the roof with materials of similar quality, the cost of labor, permits, and inspections are included, less the policy’s deductible” (Iowa Insurance Division).
On an actual cash value policy it pays “replacement cost minus depreciation” (Texas Department of Insurance). Either way, you borrow the contract price minus what the policy pays.
Do the claim arithmetic first. The hail claim estimator works out depreciation, actual cash value and the deductible. Then bring the shortfall here.
A contractor offering to “cover your deductible” may be breaking the law
Texas. The Texas Department of Insurance: “It’s also illegal in Texas for a contractor to offer to waive, rebate, or absorb a property policyholder’s deductible.”
Texas Insurance Code §707.002: “A person insured under a property insurance policy shall pay any deductible applicable to a first-party claim made under the policy.”
Minnesota. Minnesota Statutes §325E.66, subd. 1(a)(1), bars a residential contractor, “as an inducement to the sale or provision of goods or services to an insured,” from promising “to pay, directly or indirectly, all or part of any applicable insurance deductible.”
What we are not saying. There is no national rule. These are the two states we read on September 5, 2026. Ask your own state’s insurance department, and treat a “we’ll eat your deductible” pitch as a reason to check.
Financing the deductible is a different thing from waiving it
Source fact. Texas Insurance Code §707.004 lets an insurer hold back recoverable depreciation until it gets “reasonable proof of payment by the policyholder of any deductible applicable to the claim.”
Proof includes “a canceled check, money order receipt, credit card statement, or copy of an executed installment plan contract or other financing arrangement that requires full payment of the deductible over time.”
HyreRoof reading. That is a statute contemplating exactly the thing this calculator
prices (a homeowner borrowing the deductible and repaying it in full over time) and treating it
as legitimate proof of payment.
Borrowing a deductible you will genuinely repay and having a contractor quietly absorb one are
not the same transaction, even when the monthly payment looks identical. The tool has a
deductible field for this reason: flagging it changes no arithmetic, and changes the warning.
The claim clock and the finance clock run at different speeds
The Texas department’s storm guidance: “make only temporary repairs to protect your house and belongings… Don’t make permanent repairs.” A finance agreement signed on the day of the sales call does not wait for the claim.
HyreRoof recommendation. Do not sign financing before the adjuster’s scope and the settlement basis are in hand.
Once the settlement is known, the amount you need to borrow is a fact rather than an estimate, and the cash price you ask for is the cash price for the actual scope.
HyreRoof holds no dataset of claims, settlements or adjuster decisions, and does not act as a public adjuster or contractor.
Nothing here is legal, insurance or engineering advice; your policy language and your state’s regulations are the binding version.
The comparison case: your own money, or your own lender
The calculator prices the contractor plan against borrowing the same cash price yourself, over the same term. That is the only comparison that holds the roof constant, and it is only possible if you have the cash price.
Home equity is secured on the house, and that cuts both ways
Source fact. The FTC calls a home equity loan “a loan that’s secured by your home” and a HELOC “a revolving line of credit, similar to a credit card, except it’s secured by your home.”
The consequence, in the FTC’s words: “if you don’t repay the outstanding balance, the lender can take your home as payment for your debt.”
A secured loan can price below an unsecured contractor loan because you have put the house up. That is a real trade, not a free lunch.
The rescission right that only comes with the secured product
Source fact. Under 12 CFR §1026.23(a)(1), “each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction.”
Under (a)(3), that right runs “until midnight of the third business day following consummation, delivery of the notice required by paragraph (b), or delivery of all material disclosures, whichever occurs last.” If the notice or disclosures were never delivered, it can extend to three years.
HyreRoof analysis. A home equity line against your house carries a federal
three-day right to walk away. An unsecured contractor-arranged installment loan generally does
not, because §1026.23 attaches to a security interest in the dwelling.
The product that sounds scarier carries the cooling-off period; the one signed on a tablet at
the kitchen table may not. Separately, some door-to-door sales carry their own state or
FTC cooling-off rights: a different rule, with different triggers, worth asking about by name.
PACE: a financing route that becomes a lien on the property
Source fact. The CFPB’s PACE rule under Regulation Z, effective March 1, 2026, treats PACE financing as credit under the Truth in Lending Act, with ability-to-repay rules and mortgage-style disclosures.
It covers “the costs of home improvements that results in a tax assessment on the real property of the consumer.”
HyreRoof reading. Some PACE programs cover roofing and some do not. Repayment
arrives on the property tax bill, not as a loan payment.
Under the 2026 rule you should get TILA-style disclosures, including an APR you can put into
the calculator above. Check what your program covers with its administrator, not the salesperson.
Paying cash is a comparison, not a virtue
Set the alternative rate to zero and the tool prices the roof as a cash purchase. Every financed option is then measured against that: financing is a product you buy alongside the roof, and it has a price.
And sometimes the contractor plan wins. At a genuine 0% over five years, even carrying a 15% price gap, our worked example comes out $695 cheaper than an 8.5% home equity line on the cash price.
This tool is not an argument that contractor financing is bad. It is an argument that you cannot tell without the cash price.
HyreRoof analysis: two policy lines can move more money in a roof claim than the damage does: replacement cost or actual cash value, and a dollar or percentage wind/hail deductible. Both are on the declarations page. Read them before a storm.
What to ask for, in writing, before you sign anything
The cash price for the identical scope
Same tear-off, underlayment, shingle line, flashing and warranty, with no financing. Without it the calculator has nothing to measure.
The Truth in Lending disclosure, not just the payment
Amount financed, APR, finance charge and total of payments are separate boxes. Ask for all four.
Whether the rate is promotional, and what it becomes
A step-up rate or deferred interest is a different loan. The calculator models one flat rate.
The lender’s name, apart from the contractor’s
You may be signing two contracts with two companies. Ask who holds the loan, whether it will be sold, and what happens if the roofer stops trading before the work is done.
What the settlement pays and what you are borrowing
On a claim, borrow the shortfall, not the contract price, or you can end up over-borrowed when the settlement check arrives.
An offer to absorb or rebate the deductible
Unlawful for the contractor in Texas and Minnesota. The money has to come from somewhere, and it can come from the contract.
Signing financing on the first visit
A price only available today is a sales technique. The arithmetic here will still work tomorrow.
Embed this calculator
You can put this roof financing calculator on your own site, free. Paste the code below into your page’s HTML. Keep the credit link under it. The tool runs in the reader’s browser and stores nothing.
Questions this calculator answers
Why does this calculator not ask for a dealer fee percentage?
It would need a default, and no primary source publishes roofing finance markups. The CFPB documented dealer fees in solar lending, and we will not reuse that as a roofing number. The cash price is a figure you can get, and the markup falls out of it.
What is a dealer fee, and does roofing have them?
A payment from the contractor to a lender for the right to offer financing or a rate, which can be built into the loan principal. The CFPB documented it in solar. Roofing has the same ingredients: a contractor-arranged loan and a price quoted as a payment. Your cash price shows whether yours carries one.
Is my stated APR wrong or illegal?
Not necessarily. Under Regulation Z the APR is computed on the amount financed, and a markup inside the price is principal, not a finance charge. The disclosure can be accurate and still not show what the roof costs.
How do I get the cash price if the salesperson will not give one?
Ask in writing for the identical scope paid in full with no financing. If it matches the financed price, there is no markup. If it is lower, enter it above. If it never comes, that tells you something too.
Why does a shorter term show a higher effective rate?
The markup is a fixed number of dollars recovered over fewer payments. In our example, a 15% gap is 16.05% over ten years and 19.27% over five. The five-year loan still costs less in total dollars.
My roof is an insurance claim. Does any of this change?
Yes. You finance the shortfall between the settlement and the contract price, so run the hail claim estimator first. Some states, including Texas and Minnesota, bar contractors from absorbing or promising to pay your deductible.
Can I finance my deductible?
That differs from a contractor absorbing it. Texas Insurance Code §707.004 accepts “an executed installment plan contract or other financing arrangement that requires full payment of the deductible over time” as proof of payment. Check your own state’s rules.
Should I use a HELOC or a home equity loan instead?
Run the comparison row. A secured loan can price lower because the house is at stake. It generally carries a federal right to rescind “until midnight of the third business day” under 12 CFR §1026.23; an unsecured contractor loan generally does not.
What about 0% financing offers?
They can be good, or a price increase wearing a rate. In our example, 0% over 60 months with a 15% gap is 6.59% effective and still beats an 8.5% equity line. With a 25% gap it is 11.96%. Only the cash price tells them apart.
What does this tool not model?
Step-up promotional rates, deferred interest, origination fees outside the price gap, prepayment, variable rates, insurance money arriving mid-loan, and tax treatment. It is arithmetic on your figures, not a quote or advice.
Sources and methodology
Figures dated September 5, 2026. Last reviewed .
Issue Spotlight: Solar Financing (Consumer Financial Protection Bureau, retrieved September 5, 2026). Published August 7, 2024. Dealer fees built into principal outside the stated APR, and the “30% or more” figure. A finding about solar lending, cited for the mechanism, never used as a roofing number.
12 CFR §1026.23, Right of rescission (Regulation Z) (CFPB, read at the Cornell Legal Information Institute mirror, retrieved September 5, 2026). The three-business-day rescission right on a security interest in the dwelling. Read at Cornell LII because ecfr.gov redirected automated retrieval.
12 CFR §1026.22, Determination of annual percentage rate (Regulation Z) (CFPB, read at the Cornell Legal Information Institute mirror, retrieved September 5, 2026). The rule under which a stated APR is computed on the amount financed. Basis for the statement that a compliant APR can still exclude a markup already inside the price.
12 CFR §1026.4, Finance charge (Regulation Z) (CFPB, read at the Cornell Legal Information Institute mirror, retrieved September 5, 2026). Defines which charges are finance charges and which are not: the distinction that keeps a price markup outside the disclosed rate.
Home Equity Loans and Home Equity Lines of Credit (Federal Trade Commission, retrieved September 5, 2026). Source for the definitions of a home equity loan and a HELOC and for "if you don’t repay the outstanding balance, the lender can take your home as payment for your debt".
Roofing and insurance: Know the law (Texas Department of Insurance, retrieved September 5, 2026). Source for "It’s also illegal in Texas for a contractor to offer to waive, rebate, or absorb a property policyholder’s deductible." A Texas statement about Texas.
Texas Insurance Code §707.004, Reasonable proof of payment (Texas Legislature, read at texas.public.law, retrieved September 5, 2026). Source for a "copy of an executed installment plan contract or other financing arrangement that requires full payment of the deductible over time" counting as reasonable proof of deductible payment.
Homeowners insurance guide and deductibles (Texas Department of Insurance, retrieved September 5, 2026). Source for "replacement cost minus depreciation" and for the temporary-repairs guidance quoted in the insurance section.
Related
Contract red flag checkerCheck the deposit, license and cancellation terms before you sign the loan and the roof.