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Land loan monthly payment
Price, down payment, APR, and term in — monthly payment, total paid, and total interest out. Built for land: big down payments, above-mortgage rates, and shorter terms.
CALCULATOR · MONEY · LAND
Land Loan Payment Calculator
$75,000 of land with 20% down at 8.5% APR over 15 years costs $590.84 a month — $106,351.87 all-in, $46,351.87 of it interest. Land loans price above mortgages and want bigger down payments: see what 50% down or a 10-year term does to your payment below.
The 60-second rule
Monthly payment = loan × r ÷ (1 − (1 + r)−n), where loan is price minus down payment, r is APR ÷ 12, and n is years × 12. At the defaults: loan = $75,000 × 0.8 = $60,000, r = 0.085 ÷ 12 = 0.7083%, n = 180 months — payment = $590.84 a month, $106,351.87 all-in, $46,351.87 of it interest. The land-loan twist: rates run 1–3 points above home mortgages and lenders want 20%+ down, so the same $75,000 costs noticeably more than a $75,000 house would.
The worked example, line by line
Setup: $75,000 parcel, 20% down, 8.5% APR, 15-year term.
The loan amount. $75,000 × (1 − 0.20) = $60,000 borrowed — the $15,000 down payment never accrues interest.
The monthly rate and payment count. r = 8.5% ÷ 12 = 0.0070833; n = 15 × 12 = 180 payments.
The payment. $60,000 × 0.0070833 ÷ (1 − 1.0070833−180) = $425 ÷ 0.719313 = $590.84 a month.
The totals. $590.84 × 180 = $106,351.87 paid over 15 years; minus the $60,000 borrowed = $46,351.87 of pure interest — 43.6% of every dollar you pay.
Branch — 50% down: borrowing only $37,500 at the same 8.5% for 15 years: payment $369.28 a month, total $66,469.92, interest $28,969.92. Half the loan, $221.56 less a month — and 50% down is what many lenders require on raw, unimproved land.
Branch — 10-year term: $60,000 at 8.5% for 10 years: payment $743.91 a month ($153.07 more), total $89,269.70, interest $29,269.70 — $17,082.17 less interest than the 15-year loan. Shorter terms are the cheapest money you can buy.
Branch — 25-year term: $60,000 at 8.5% for 25 years: payment $483.14 a month ($107.70 less), total $144,940.88, interest $84,940.88 — $38,589.01 more interest than the 15-year loan. Illustrative: most land lenders cap terms at 15–20 years, so treat this as what you’re avoiding, not what you’re offered.
Raw vs improved land. Raw (unimproved) land — no road, no utilities, no survey — is the lender’s riskiest collateral: expect 25–50% down and the highest rates. Improved land — surveyed, road access, utilities at the lot line — prices closer to the defaults above. The calculator’s math doesn’t change; your lender’s terms will.
Output · formula · meaning
| Output | Formula | What it means |
|---|---|---|
| Amount borrowed | price × (1 − down%) | $60,000.00 at the defaults — the price minus your $15,000 down payment. |
| Monthly payment | loan × r ÷ (1 − (1 + r)−n) | $590.84 at the defaults — the check you write every month for 15 years. |
| Total paid | payment × months | $106,351.87 at the defaults — every dollar that leaves your pocket, principal plus interest. |
| Total interest | total paid − amount borrowed | $46,351.87 at the defaults — 43.6% of all payments: the true price of borrowing for land. |
Who uses this
- The future homesteader: eyeing a $75,000 five-acre parcel — learns the payment is $590.84, not the $400 they’d guessed from mortgage math, before making an offer.
- The raw-land buyer: enters 50% down because that’s what their lender demands on unimproved land — sees $369.28 a month and plans the cash pile accordingly.
- The term optimizer: compares the 10-year and 15-year branches — $153.07 more a month buys $17,082.17 less interest.
- The investor running the numbers: checks whether the $46,351.87 of interest over 15 years still leaves room for profit when the land is eventually sold or developed.
Accuracy & limitations
This is a fixed-rate amortizing loan model: same payment every month, interest computed monthly on the declining balance. It does not include origination fees, points, closing costs, surveys, or property taxes and insurance — real land deals stack several thousand dollars of those on top. Many land loans are balloon or adjustable-rate (e.g. 5-year balloon at a lower rate); this calculator prices neither, so a balloon quote will look cheaper here than it really is. APR is your quote, not a market average: raw-land rates vary wildly by lender, parcel, and borrower — get real quotes and plug them in. What this skips: prepayment penalties, the tax treatment of land-loan interest, and the fact that some lenders won’t finance land at all below a minimum parcel size or loan amount.
Cite this calculatorBright Side Kit. “Land Loan Payment.” brightoolbox.com, 2026.
Bright Side Kit. "Land Loan Payment." https://brightoolbox.com/land-loan-payment/ Accessed October 23, 2026.Frequently asked questions
Why are land loan rates higher than mortgage rates?
Bare land is harder collateral: no house to sell, slower to sell, easier to walk away from. Lenders price that risk at roughly 1–3 points above home mortgages — hence the 8.5% default here vs ~6.5% on a house. Improved land with utilities prices a little better than raw land.
How much down payment do land lenders want?
20% minimum is the floor for improved land; raw, unimproved land often requires 25–50% down. The 50% branch above shows the payoff: $369.28 a month and only $28,969.92 of lifetime interest.
Can I get a 30-year term on a land loan?
Rarely. Most land lenders cap terms at 15–20 years — long terms on depreciating-risk collateral don’t pencil for them. The 25-year branch above is illustrative: it saves $107.70 a month but costs $38,589.01 more in interest.
What is the difference between raw and improved land?
Raw land has no road, utilities, or survey — maximum lender risk, maximum down payment, highest rates. Improved land is surveyed with road access and utilities at the lot line — closer to the defaults in this calculator. Same math, very different loan offers.
Does the payment include property taxes or insurance?
No — this is principal and interest only. Vacant-land property taxes are usually modest but real, and some lenders require insurance; add them yourself on top of the $590.84 to get your true monthly cost.
Can I roll a land loan into a construction loan later?
Often yes — many lenders refinance the land loan into a construction loan when you build, and the equity you’ve built (down payment + appreciation) counts toward the construction down payment. Ask your lender about their construction-perm program before you buy the land.
Is land loan interest tax deductible?
Sometimes: if the land is an investment, interest may be deductible as investment interest; for a future personal residence it generally isn’t until you build. Tax treatment is situational — confirm with a tax pro for your case.