In this paper, a low complexity coding unit (CU)-level rate and distortion estimation scheme is proposed for High Efficiency Video Coding (HEVC) hardware-friendly implementation where a Walsh-Hadamard transform (WHT)-based low-complexity integer discrete cosine transform (DCT) is employed for distortion estimation. Since HEVC adopts quadtree structures of coding blocks with hierarchical coding depths, it becomes more difficult to estimate accurate rate and distortion values without actually performing transform, quantization, inverse transform, de-quantization, and entropy coding. Furthermore, DCT for rate-distortion optimization (RDO) is computationally high, because it requires a number of multiplication and addition operations for various transform block sizes of 4-, 8-, 16-, and 32-orders and requires recursive computations to decide the optimal depths of CU or transform unit. Therefore, full RDO-based encoding is highly complex, especially for low-power implementation of HEVC encoders. In this paper, a rate and distortion estimation scheme is proposed in CU levels based on a low-complexity integer DCT that can be computed in terms of WHT whose coefficients are produced in prediction stages. For rate and distortion estimation in CU levels, two orthogonal matrices of 4 x 4 and 8 x 8, which are applied to WHT that are newly designed in a butterfly structure only with addition and shift operations. By applying the integer DCT based on the WHT and newly designed transforms in each CU block, the texture rate can precisely be estimated after quantization using the number of non-zero quantized coefficients and the distortion can also be precisely estimated in transform domain without de-quantization and inverse transform required. In addition, a non-texture rate estimation is proposed by using a pseudoentropy code to obtain accurate total rate estimates. The proposed rate and the distortion estimation scheme can effectively be used for HW-friendly implementation of HEVC encoders with 9.8% loss over HEVC full RDO, which much less than 20.3% and 30.2% loss of a conventional approach and Hadamard-only scheme, respectively.