Land Loan Calculator

Estimate the monthly payment, down payment, and total interest for a land loan using the standard loan amortization formula.

Quick Facts

Formula
M = L × i / (1 − (1 + i)^−n)
L is the loan amount, i the monthly interest rate, and n the total number of monthly payments.
Lender risk
Higher rates, larger down payments
Raw land is harder to resell than a home, so land loans typically cost more and require more down than a mortgage.

Your Results

Calculated
Monthly payment
-
Principal and interest
Down payment
-
Paid upfront at closing
Total interest
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Over the full loan term
Total cost of land
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Down payment + all payments

Ready

Enter the land price, down payment, interest rate, and term, then press Calculate.

How the Land Loan Calculator works

Buying a vacant lot or a parcel of raw acreage is financed differently from buying a home, and this calculator focuses on the core arithmetic of that financing: given a land price, a down payment, an interest rate, and a term, what is the fixed monthly payment, and what does the loan cost in total by the time it is paid off? It uses the same standard loan amortization formula that governs mortgages and auto loans, applied to the loan amount left after your down payment.

The formula

The loan amount is the land price minus the down payment: L = Price × (1 − Down payment %). For a monthly interest rate i (the annual rate divided by 12) and n total monthly payments (term in years × 12), the fixed monthly payment is:

M = L × i / (1 − (1 + i)−n)

If the interest rate is 0%, this reduces to M = L / n — the loan amount split evenly across the payments with no interest. The calculator assumes a fixed rate for the full term and end-of-month payments, and it computes principal and interest only.

Worked example

Take a $75,000 lot with a 20% down payment, an 8% annual rate, financed over 15 years. The down payment is $15,000, leaving a $60,000 loan. The monthly rate is 0.08 / 12 ≈ 0.006667 and n = 180 payments. The formula gives a monthly payment of roughly $573. Over 15 years that is about $103,200 in total payments, of which around $43,200 is interest — plus the $15,000 down payment, for a total cost near $118,200 for a $75,000 parcel.

Why land loans differ from home mortgages

  • Higher rates: raw or unimproved land produces no income and can be slower to resell than a house, so lenders price land loans higher than comparable home mortgages to offset that risk.
  • Larger down payments: many lenders ask for 20% to 50% down on land, with raw land at the high end and improved, build-ready lots often needing less.
  • Shorter terms: land loans are frequently written over 5 to 20 years rather than the 30-year terms common for home mortgages, which raises the monthly payment relative to the loan amount.
  • Land type matters: lenders generally distinguish between raw land (no utilities or road access), unimproved land (some infrastructure), and improved land (utilities, access, ready to build), pricing risk accordingly.

What this calculator does not include

The result is principal and interest only. It does not add property taxes, land or title insurance, HOA or association dues, survey and closing costs, or any balloon payment some seller-financed or short-term land loans carry at the end of the term. Build those into your own budget separately, and confirm the actual rate, term, and fees with your lender before committing.

Frequently Asked Questions

How is the land loan payment calculated?
The calculator uses the standard loan amortization formula: M = L × i / (1 − (1 + i)^−n), where L is the loan amount (land price minus down payment), i is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (term in years times 12). This produces the fixed payment that pays off the loan to zero by the end of the term.
Why do land loans have higher interest rates than home mortgages?
Raw or undeveloped land is harder for a lender to resell than a home if a borrower defaults, since it produces no income and can take longer to sell. Lenders offset that added risk with higher interest rates, shorter terms, and larger required down payments compared to a typical home mortgage.
How much down payment do I need for a land loan?
It varies by lender and land type, but land loans commonly require a larger down payment than home mortgages, often in the 20% to 50% range. Raw land with no utilities or road access typically requires more down than an improved lot ready for construction.
Does this calculator include property taxes or other costs?
No. This calculator computes principal and interest only, based on the loan amount, rate, and term you enter. Property taxes, homeowners or land insurance, HOA dues, and closing costs are not included and would add to your actual total cost of ownership.

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