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.
The calculator works interest out monthly. Land lenders may charge higher rates, require shorter terms or lend in stages, so use the rate and term from your own quote.
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.
What this calculator assumes
The calculator treats the land loan as a single loan on one nominal rate for the whole term, repaid in equal monthly payments, with interest worked out monthly at one twelfth of the annual rate. Enter the price of the plot and the deposit you will put in.
It leaves out planning and surveying costs, legal fees and any later build finance, so treat the result as a guide for comparing options rather than an offer.
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.