How land loans work
Lenders treat land as riskier than a finished home, so land and plot loans usually need a much larger deposit, often a third or more of the price, and fewer lenders offer them.
If you plan to build a home on the plot, a self-build mortgage can release money in stages as the work progresses.
Worked example
A £150,000 plot with a £50,000 deposit means borrowing £100,000. At 7% over 15 years, the monthly payment is £898.83, £161,789.09 in total.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
Check before you buy
Check whether the land has planning permission, access and utilities, as these affect both its value and whether lenders will lend on it.
Inputs for the land loan mortgage calculator
Land price
The price of the land or plot.
Deposit
What you're paying upfront. Land loans usually need a bigger deposit than home mortgages.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many years you'll repay over.
CALCULATOR QUESTIONS
Land loan mortgage calculator questions
Can I get a mortgage to buy land?
Yes, but fewer lenders offer them and they usually need a larger deposit than a home mortgage.
How much deposit do I need for land?
Often a third or more of the price, depending on the lender and whether the land has planning permission.
What if I want to build a house on it?
Look at a self-build mortgage, which releases money in stages as building progresses.
Does planning permission matter?
Yes. Land with planning permission is usually easier to borrow against.