Considering buying Vacant Land in both Metro and Rural Locations? We've got you covered with our home loan services!

Many individuals share the romantic dream of creating their ideal home or investment property in the perfect location. Once you’ve discovered that ideal plot of land, the primary challenge is securing the finances for land acquisition and construction. An incorrect approach to financing could potentially jeopardise all the well-thought-out plans you’ve made.

Banks have stricter lending guidelines for blocks of land than for actual properties, and in many cases, they won’t finance remote or large properties.

This can be particularly frustrating for those looking to buy land to build and construct in a more secluded or expansive vacant block.

The good news is that each lender has different lending guidelines, so it’s still possible to get your loan for vacant land approved.

Professional Home Loans can assist with the following:

– 95% of the Value of the Land up to 11 hectares in size

– 80% on Acreage and Rural Land up to 50 hectares in size

– No requirement to build within five years

– Check for postcode restrictions

When you work with Professional Home Loans, you can trust us to guide you through the complexities of land financing and make your dream a reality.

How will the bank assess your block?

When considering a loan for vacant land, banks have specific criteria they use to assess the viability of the property. Understanding these factors can help you better prepare for the loan application process and increase your chances of approval.

Here are some key aspects that banks typically evaluate:

– Land size: The larger the land, the fewer people are interested in buying it.

– Location: Land inside major cities and regional centres can be financed quite easily. At least one of our lenders has no location restrictions Australia-wide.

– Access: The land must have direct access via an all-weather road, with dirt roads being acceptable as long as they are well maintained, and the property can be reached by a standard vehicle, not requiring a 4WD.

– Services: The land needs to be within the range to connect to the electricity grid without incurring high costs. While town water and sewerage services are not necessary as many Australian properties have tank water or septic tanks, some lenders may limit borrowing to 80% of the property’s value.

– Zoning: Land zoned as rural or rural residential may be considered, but industrial, commercial, and farm/agricultural zoning are considered on a case-by-case basis. If the land is subject to GST, it will typically be seen as commercial property (updated external link) by the banks.

– Land use: The land should be utilised for personal or investment purposes, rather than for agricultural use. However, hobby farms with minimal agricultural enhancements and generating little income from farm production are typically accepted.

– Intention to build: Many lenders consider someone who’s building on the land right away or within a year to be a lower risk than someone who has no intention to build. If you’re not, the bank may consider you to be a speculative investor and may decline your vacant land loan.

What is the next step?

With Professional Home Loans as your trusted mortgage partner, we specialise in navigating the complexities of buying a vacant land loan. We understand the importance of securing the financing you need to achieve your homeownership dreams, and we’re here to guide you through the process every step of the way.

There is no cost for our service and absolutely no obligation.

You can read more about our full service in our blog.