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How To Buy Plots

Land Loan Calculator

Estimate the monthly payment, total interest, and year-by-year balance on a land loan. Adjust price, down payment, rate, and term to see what a plot really costs to finance.

$
%

$18,000 down. Banks are guided to ask about 35% on raw land and less on improved lots.

%

Use the rate a lender has actually quoted you. The starting value is only an example.

years

Terms vary. Bank land loans are often short with a balloon payment, while farm lenders can go much longer.

Estimated monthly payment

$425.99

Principal and interest only

Loan amount
$42,000
Down payment
$18,000
Total interest
$34,679
Total of all payments
$76,679
Year-by-year balance
YearInterestPrincipalBalance
1$3,724$1,388$40,612
2$3,593$1,518$39,093
3$3,451$1,661$37,432
4$3,295$1,817$35,616
5$3,125$1,987$33,629
6$2,938$2,174$31,455
7$2,734$2,377$29,078
8$2,511$2,600$26,477
9$2,268$2,844$23,633
10$2,001$3,111$20,521
11$1,709$3,403$17,118
12$1,390$3,722$13,396
13$1,040$4,071$9,325
14$658$4,453$4,871
15$241$4,871$0

How to use this calculator

Enter the price of the land, how much you plan to put down, and the rate and term a lender has quoted you. The calculator returns the monthly principal-and-interest payment and how much interest you would pay over the life of the loan.

Land loans are priced differently from home mortgages. Lenders treat vacant land as a riskier asset, so expect a larger down payment, a shorter term, and a higher rate than you would see on a house. Our guide to how land loans work explains why, and what your alternatives are.

What the payment leaves out

The figure above covers principal and interest only. Budget separately for:

  • Property taxes. Vacant land is usually taxed at a lower dollar amount than improved property, but the bill starts the day you own it.
  • Closing costs. Title search, title insurance, recording fees, and any lender fees.
  • Due diligence. A survey, soil or percolation testing, and any environmental checks you order before closing.
  • Development. A driveway, well, septic system, and power can cost more than the land itself on a raw parcel.

How the math works

This is the standard fixed-rate amortization formula. The monthly payment equals the loan amount times the monthly rate, divided by one minus (1 + monthly rate) raised to the negative number of payments. Each month, interest is charged on the remaining balance and the rest of the payment reduces principal, which is why early payments are mostly interest.

Some land loans are not fully amortizing. A balloon loan calculates payments over a long period but requires the remaining balance in full after a few years. If a lender or seller offers you a balloon, use the year-by-year table to see how much you would still owe when it comes due.

This calculator gives estimates for planning. It is not a loan offer or financial advice. Your lender's disclosures are the numbers that count.