Land Loan Calculator

Financing raw land is harder than financing a house. Vacant land produces no income and is slower to resell, so lenders treat it as riskier collateral, charging higher rates, requiring larger down payments, and offering shorter terms than a home mortgage. Improved or buildable lots get better terms than remote raw acreage.

Before you commit, check how this payment affects your debt-to-income ratio.

This calculator amortizes a land loan, totals the interest, and tracks the land's value against your balance as it appreciates, so you can see your equity build from both payments and rising land value.

If you're weighing land against a traditional home purchase instead, our Home Affordability Calculator shows the maximum home price your income and existing debt would realistically support, for a side-by-side comparison.

How does this calculator work?

Enter the land's purchase price and the amount you're financing. The calculator computes your monthly payment, total interest, and a full amortization schedule.

It's a solve-for-any-field tool: enter a monthly payment instead of a loan amount (or term, or rate) and it back-solves the missing value.

Set an annual appreciation rate to track the land's value against your loan balance and watch your equity grow.

Add an extra monthly payment to shorten the loan. Many land buyers pay the balance down aggressively before refinancing into a construction loan, and an Interest Savings From Extra Payment card shows exactly what the extra saves.

Worked example

Buy an $80,000 parcel with 25% down ($20,000), financing $60,000 at 8.5% over 15 years.

Purchase price

$80,000

Down payment (25%)

$20,000

Amount financed

$60,000

Term / rate

15 yrs / 8.5%

Monthly payment

$590.84

Total interest

$46,352

How the numbers work

The $590.84 payment is the amortization result for $60,000 at 8.5% (about 0.708% per month) over 180 months.

The first month's interest is $60,000 × 0.708% = $425.00, so only $165.84 of the payment reduces principal at the start. The higher rate that lenders charge on land means interest dominates the early payments even more than on a home mortgage.

Over all 180 payments you repay $106,352: the $60,000 borrowed plus $46,352 in interest.

The higher land-loan rate and larger down payment make the financing noticeably more expensive than a comparable home mortgage: $46,352 in interest over 15 years. If the land appreciates, the value chart shows your equity climbing from both directions.

Raw land, improved lots, and where these loans come from

Lenders grade land by how close it is to being buildable, and the loan-to-value ratio steps down as risk goes up. Raw acreage with no road access, utilities, or perc test typically tops out around 50 to 65% LTV, meaning 35 to 50% down. An improved or platted lot with road frontage and utilities at the property line often reaches 75 to 80% LTV, closer to a conventional mortgage. That gap is the single biggest reason two land loans for the same dollar amount can carry very different down payments.

Zoning, easements, and access matter as much as the price. A parcel that looks cheap but lacks a recorded easement to a public road, or sits on unbuildable wetland, can be difficult to finance at any rate, since the lender is ultimately underwriting the land's resale value if you default. Getting a perc test, survey, and zoning confirmation before you make an offer avoids discovering a financing problem after you're under contract.

Because raw land is a niche product, it's usually not the mortgage desk at a national bank that writes these loans. Local and community banks and credit unions familiar with the area are common sources, and for agricultural or rural acreage, USDA and Farm Credit System lenders specialize in exactly this kind of financing. Seller financing is also common on raw land: an owner willing to carry the note can be more flexible than an institutional lender, though usually at a higher rate and a shorter balloon term.