Estimate the payment on a loan to buy land. Choose raw, unimproved or improved land, set the down payment, rate and amortization, and optionally add a balloon date as many land and seller-financed loans use. You get the monthly payment, any balloon due, cash to close and a year-by-year schedule.
Last updated:
Land & down payment
$
%
% / yr
Term & balloon
years
Payments are based on this
years
Costs (optional)
% of loan
$
Survey, title, appraisal
$/ yr
Enter your values to see the result.
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How to use the Land Loan Calculator
Enter the land price and pick the land type (raw, unimproved or improved).
Set the down payment and interest rate from your lender or seller.
Enter the amortization period, and tick Balloon if the loan is due early, then set when.
Add points, closing costs and property tax if you want the full cost.
Press Calculate and review the payment, balloon and the yearly schedule.
How a land loan payment is calculated
Loan amount = land price − down payment.
Monthly payment = L × r(1 + r)n ÷ ((1 + r)n − 1), where r = annual rate ÷ 12 and n = amortization years × 12.
Balloon (if any) = remaining balance after k payments = L(1 + r)k − P × ((1 + r)k − 1) ÷ r.
Cash to close = down payment + points (% of the loan) + other closing costs.
Example: $120,000 of unimproved land with 25% down leaves a $90,000 loan. At 8.5% amortized over 20 years the payment is $781.04 a month. If the note has a 5-year balloon, about $79,314 is still owed when it comes due, so most of the principal remains to be refinanced or paid off.
Typical land loan terms by land type
These are common ranges, not lender quotes. Local banks, credit unions and farm credit lenders set their own terms.
Land type
What it means
Typical down payment
Typical term
Raw land
No road, power, water or sewer; often rural acreage
30% – 50%
Short; often 5 – 15 years or a balloon
Unimproved land
Some access or utilities nearby, not ready to build
20% – 35%
10 – 20 years, balloons common
Improved lot
Road access and utilities in place, buildable
15% – 25%
Up to 20 – 30 years
Balloon vs. fully amortized: same payment, different ending
$150,000 lot, 20% down, 7.75%, 20 years fully amortized
$120,000
$985.14
None
Tips for financing land
Check zoning, access and utilities first. Perc tests, easements and road access affect both value and how lenders classify the land.
Plan for the balloon. Know how you will refinance or pay it, and whether the lender offers an extension.
Ask about seller financing. Owners of rural land often carry the note with a balloon, sometimes with less down.
Building soon? A construction-to-permanent loan may roll the land into one loan with better terms.
Budget for carrying costs such as property tax, insurance and HOA or road maintenance fees while the land is vacant.
Frequently asked questions
How much down payment do you need for a land loan?
Land loans usually need more down than home loans because land is harder to resell and produces no income. As a rough guide, lenders often ask about 30% to 50% for raw land, 20% to 35% for unimproved land and 15% to 25% for an improved, buildable lot. Your credit, the lender and the property all affect the figure.
Why are land loan rates higher than mortgage rates?
Vacant land is riskier collateral: there is no house to secure the loan, values are less predictable and borrowers are more likely to walk away from land than from their home. Lenders offset that with higher rates, shorter terms and larger down payments.
What is a balloon payment on a land loan?
Many land and seller-financed loans calculate payments over a long amortization, such as 20 years, but make the remaining balance due after 3 to 10 years. That lump sum is the balloon. Borrowers typically refinance, sell or pay it from savings. The calculator shows the exact balance due.
How is the land loan payment calculated?
The standard amortizing payment formula is used: P = L × r(1 + r)^n ÷ ((1 + r)^n − 1), where L is the loan amount, r is the annual rate ÷ 12 and n is the amortization in months. A balloon does not change the payment, only how many payments you make before the balance is due.
What is the difference between raw, unimproved and improved land?
Raw land has no utilities, road access or development. Unimproved land may have some access or nearby utilities but is not ready to build. Improved land has road access and utilities such as water, sewer or septic approval and power, so it is the easiest to finance.
Can I use a mortgage to buy land?
A standard home mortgage generally needs a house on the property. To buy only land, buyers use land or lot loans from local banks and credit unions, seller financing, home equity, or a construction-to-permanent loan if they will build soon.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.