Loan for Vacant Land

Loans for vacant land are not available from all lenders. Vacant land is classed with construction because regulations require borrowers to commit to construction. Otherwise the land purchase is considered a speculative investment loan rather than a residential loan

Construction loans are typically limited to 12 months, but can be extended where circumstances have changed. How your loan is considered depends on whether you are buying just the land, a house and land package or an off the plan package. For just vacant land you will usually need 5% to 10% deposit but remember that you have to commit to commence construction and so most lenders will want to understand how you are going to come up with sufficient funds for the rest of the work ie: lenders will require you to have a minimum 5% of the construction cost or at least see how you plan to accumulate those funds over the relatively short term that you have.