Land Loan Calculator
Monthly payment and total cost of a land or lot loan
Last updated September 5, 2026
Method: The monthly payment uses the standard amortization formula on the loan amount (price minus down payment). A balloon is the exact remaining balance at the chosen year, computed month by month. Interest-only mode charges the monthly rate on the full balance and leaves the principal due at the end.
Included: Monthly payment, loan amount and loan-to-value, total interest, total cost including any balloon, a payment grid by rate and term, and a year-by-year balloon or amortization schedule.
Not included: Closing costs, survey and appraisal fees, property tax on the parcel, construction financing and lender-specific underwriting rules. Results are estimates, not a loan offer.
🌄 Monthly land loan payment
💰 Loan summary
📊 Monthly payment by rate and term
$112,500 loan, fully amortizing.
| Rate | 5 yr | 10 yr | 15 yr | 20 yr | 30 yr |
|---|---|---|---|---|---|
| 7.00% | $2,228 | $1,306 | $1,011 | $872 | $748 |
| 7.50% | $2,254 | $1,335 | $1,043 | $906 | $787 |
| 8.00% | $2,281 | $1,365 | $1,075 | $941 | $825 |
| 8.50% | $2,308 | $1,395 | $1,108 | $976 | $865 |
| 9.00% | $2,335 | $1,425 | $1,141 | $1,012 | $905 |
📅 Amortization by year
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | $4,048 | $8,854 | $108,452 |
| 2 | $4,384 | $8,518 | $104,069 |
| 3 | $4,747 | $8,154 | $99,322 |
| 4 | $5,141 | $7,760 | $94,180 |
| 5 | $5,568 | $7,333 | $88,612 |
| 6 | $6,030 | $6,871 | $82,582 |
| 7 | $6,531 | $6,371 | $76,051 |
| 8 | $7,073 | $5,828 | $68,978 |
| 9 | $7,660 | $5,241 | $61,318 |
| 10 | $8,296 | $4,606 | $53,023 |
| 11 | $8,984 | $3,917 | $44,039 |
| 12 | $9,730 | $3,171 | $34,309 |
| 13 | $10,537 | $2,364 | $23,771 |
| 14 | $11,412 | $1,489 | $12,359 |
| 15 | $12,359 | $542 | $0 |
Estimate, not a loan offer or financial advice. Land and lot loans are priced by each lender based on the parcel (raw, unimproved or improved), your credit and your plans to build. The payment uses the standard amortization formula; the balloon is the exact remaining balance at that date.
Land loan calculator: payment, balloon and total cost explained
A land loan calculator turns the price of a parcel, your down payment, the rate and the term into a monthly payment and a lifetime cost. Buy a $150,000 lot with 25% down and finance the remaining $112,500 at 8% over 15 years, and the payment is $1,075.11 a month with $81,020 of interest over the life of the loan.
Land financing behaves differently from a home mortgage. Lenders usually want more money down, keep the term short, and often attach a balloon payment or an interest-only period. This lot loan calculator is built for exactly those structures. If you want a plain fully amortizing loan with no land-specific settings, the Amortization Calculator gives a month-by-month table; for a balloon note that is not tied to a parcel, use the Balloon Loan Calculator; and for a pure interest-only period on any loan, the Interest-Only Calculator. Once the house is built and you need a full PITI figure with taxes and insurance, switch to the Mortgage Calculator.
How the land loan payment is calculated
The loan amount is the purchase price minus your down payment. The amortizing monthly payment then comes from the standard formula used for every fixed-rate installment loan:
M = P × r × (1 + r)n ÷ ((1 + r)n − 1) where P is the loan amount, r is the monthly rate (annual rate ÷ 12) and n is the number of monthly payments (years × 12). In interest-only mode the payment is simply P × r and the balance never falls. A balloon keeps the amortizing payment but stops the schedule early: whatever balance remains at the balloon date is due in one lump sum. The calculator walks the schedule month by month, so the balloon and total interest are exact rather than approximated.
Worked example: $150,000 parcel, 25% down, 8%, 15 years
Start with the calculator's default inputs. The down payment is 25% of $150,000, or $37,500, leaving a loan of $112,500 (a 75% loan-to-value). The monthly rate is 8% ÷ 12 = 0.6667% and there are 180 payments. Plugging in gives a payment of $1,075.11. The first payment splits into $750.00 of interest (0.6667% of $112,500) and $325.11 of principal. Over 180 payments you send the lender $193,519.55 in total, of which $81,019.55 is interest and $112,500 returns the principal.
The balance falls slowly at first and quickly at the end. After year 1 you still owe $108,452; after year 5, $88,612; after year 10, $53,023; and the last $12,359 is retired in year 15. Year 1 costs $8,854 in interest against only $4,048 of principal, while year 15 costs just $542 of interest. That is the usual amortization pattern, and it matters for land buyers because most land loans are paid off or refinanced long before the end of the schedule, when the balance is still high.
Monthly payment by rate and term on a $112,500 land loan
Land lenders quote a wide range of rates and terms depending on whether the parcel is raw, unimproved or improved. The grid below shows the fully amortizing payment for the $112,500 example at five rates and the five terms offered in the calculator, all computed with the formula above.
| Rate | 5 years | 10 years | 15 years | 20 years | 30 years |
|---|---|---|---|---|---|
| 7% | $2,228 | $1,306 | $1,011 | $872 | $748 |
| 8% | $2,281 | $1,365 | $1,075 | $941 | $825 |
| 9% | $2,335 | $1,425 | $1,141 | $1,012 | $905 |
| 10% | $2,390 | $1,487 | $1,209 | $1,086 | $987 |
| 11% | $2,446 | $1,550 | $1,279 | $1,161 | $1,071 |
Two things stand out. First, the term moves the payment far more than the rate: at 8%, going from 15 to 30 years drops the payment from $1,075 to $825, while a full percentage point of rate moves the 15-year payment by only about $66 (from $1,075.11 to $1,141.05, or 6.1%). Second, the total interest grows fast with the term. At 8% the same loan costs $24,366 of interest over 5 years, $51,292 over 10, $81,020 over 15, $113,339 over 20 and $184,675 over 30 years, more than one and a half times the amount borrowed.
Balloon schedule: 20-year amortization, balance due early
Many land lenders size the payment on a 15- or 20-year schedule but require the balance back in 3, 5, 7 or 10 years. The payment on $112,500 at 8% amortized over 20 years is $941.00. Here is what you still owe at each common balloon date, and how much interest you paid to get there.
| Balloon after | Balloon due | Share of loan | Interest paid | Total cash out |
|---|---|---|---|---|
| 3 years | $104,758 | 93.1% | $26,134 | $138,634 |
| 5 years | $98,466 | 87.5% | $42,426 | $154,926 |
| 7 years | $91,087 | 81.0% | $57,630 | $170,130 |
| 10 years | $77,558 | 68.9% | $77,978 | $190,478 |
| 20 years (no balloon) | $0 | 0% | $113,339 | $225,839 |
After 5 years of $941 payments you have paid $56,460 to the lender, but only $14,034 of it reduced the principal; the other $42,426 was interest. The balloon of $98,466 is still 87.5% of what you borrowed. That is the trade-off of a balloon note: a lower payment today in exchange for a large balance you must refinance, sell against or pay off later.
Worked example with a balloon: $250,000 of raw land
Suppose you buy $250,000 of raw acreage with 30% down ($75,000), financing $175,000 at 9.5% amortized over 20 years with a 7-year balloon. The monthly payment is $1,631.23. Over 84 payments you pay $107,855 in interest and reduce the balance to $145,831, which is 83.3% of the original loan and comes due in year 7. Total cash through the balloon is $282,855. If you build in year 4, a construction-to-permanent loan would normally pay this balloon off; if you do not, you need a refinance or the cash.
Interest-only land loans
Some lenders, and many seller-financed deals, let you pay interest only for a period. On the $112,500 loan at 8%, the interest-only payment is $750.00 a month, which is $325.11 less than the 15-year amortizing payment. The catch is that the balance never moves: after 5 years you have paid $45,000 of interest and still owe the full $112,500, and after 10 years the interest total reaches $90,000. Interest-only makes sense as a short bridge while you line up permits and a builder, not as a long-term way to own land. Switch the calculator to Interest-only to see the payment, the interest total and the principal due at the end of the period you choose.
How the down payment changes the loan
Because lenders treat vacant land as riskier collateral than a house, the down payment is the input you have the least room to negotiate. The table shows the loan and 15-year payment at 8% on a $150,000 parcel for each down payment level.
| Down payment | Cash down | Loan amount | Payment (15 yr, 8%) | Total interest |
|---|---|---|---|---|
| 10% | $15,000 | $135,000 | $1,290.13 | $97,223 |
| 15% | $22,500 | $127,500 | $1,218.46 | $91,822 |
| 20% | $30,000 | $120,000 | $1,146.78 | $86,421 |
| 25% | $37,500 | $112,500 | $1,075.11 | $81,020 |
| 30% | $45,000 | $105,000 | $1,003.43 | $75,618 |
| 40% | $60,000 | $90,000 | $860.09 | $64,816 |
| 50% | $75,000 | $75,000 | $716.74 | $54,013 |
Each extra 5% down on this parcel is $7,500 of cash and trims the payment by about $72 a month and total interest by roughly $5,400. To plan the savings target for that cash, the Down Payment Calculator works backwards from your monthly savings.
How to use this land payment calculator
- Land or lot price: the contract price of the parcel. If the seller is carrying the financing, use the agreed price and their terms.
- Down payment: enter a percentage or tap a preset. The dollar amount appears next to the label. Land lenders commonly ask 20% to 25% or more, so start there unless you have a firm quote.
- Interest rate: use the rate you were quoted. Land rates vary widely by lender and parcel type, so the calculator does not assume one.
- Loan term: choose 5, 10, 15, 20 or 30 years. This is the amortization schedule that sets the payment size.
- Repayment: keep Amortizing for a normal principal-and-interest loan, or pick Interest-only to see the interest payment and the principal due at the end.
- Balloon payment: leave it on None for a fully amortizing loan, or pick the year the lender wants the balance back. Balloon years equal to or longer than the term are disabled because they would not change anything.
The headline card shows the monthly payment, the loan amount and down payment, the interest through the balloon or term, and the balloon due (or total of payments when there is none). Below it, the rate-and-term grid highlights your own scenario, and the schedule table lists principal, interest and balance for each year, with the balloon row marked.
Who this calculator is for
- Future home builders buying a lot now with plans to build in a few years, who need to know the carrying cost until the construction loan starts.
- Buyers of rural or recreational acreage comparing a bank's short balloon note with a seller-financed interest-only deal.
- Investors holding land for appreciation who want the total interest cost of a 5-, 7- or 10-year hold.
- Anyone comparing lender quotes where one offers a longer term at a higher rate and another a shorter term with a balloon; the grid makes the payment difference visible in seconds.
Raw land, unimproved land and improved lots
Lenders sort parcels into three rough groups, and the terms you are offered follow from which one yours falls into. Raw land has no road access, utilities or approvals; it is the hardest to finance and usually carries the largest down payment and the shortest term. Unimproved land may have a road or a power line nearby but lacks full utilities and building approvals. An improved lot sits in a subdivision or on a road with water, sewer or an approved septic site and electric service, and it is often financed on terms closer to a mortgage. The calculator does not need to know the category; it needs the down payment, rate and term the category earned you.
Key land loan terms
- Loan-to-value (LTV): the loan divided by the parcel's price or appraised value. A 25% down payment is a 75% LTV. Lenders cap LTV lower on land than on homes.
- Amortization: the schedule that splits each payment into interest and principal and sets the payment size, even when the loan matures earlier.
- Balloon payment: the remaining balance due in one lump sum at maturity. The CFPB defines it as a payment that is larger than the regular payments and comes at the end of the loan.
- Interest-only period: months or years during which you pay only interest and the principal does not fall.
- Seller financing: the seller acts as the lender under a promissory note. Terms are negotiated directly and often include a balloon or interest-only structure; run them through the calculator before signing.
- Construction-to-permanent loan: a loan that finances the build and converts to a standard mortgage at completion, commonly used to pay off a land loan.
- Percolation test and survey: due-diligence items that confirm the parcel can support a septic system and that its boundaries are what the deed says. Not part of the payment, but part of the cash you need.
What changes the result the most
- Term length: the biggest lever on the monthly payment. At 8%, $112,500 costs $2,281 a month over 5 years but $825 over 30, while total interest climbs from $24,366 to $184,675.
- Down payment: every dollar down is a dollar not borrowed, and on land it also determines whether a lender will approve the loan at all.
- Interest rate: a one-point change moves the 15-year payment by about 6% and total interest by roughly $12,000 on this example.
- Balloon date: does not change the payment, but decides how large a balance you must deal with and how soon. Five years at a 20-year amortization leaves 87.5% of the loan outstanding.
- Interest-only: lowers the payment to the interest alone but leaves 100% of the principal for the end.
Tips for financing land
- Plan the exit before you sign a balloon. Decide whether the balance will be paid from cash, a refinance or a construction loan, and check that the timeline is realistic.
- Compare total cost, not just the payment. A 30-year term at 8% looks cheap at $825 a month but costs $184,675 in interest; a 10-year term at $1,365 costs $51,292.
- Ask local banks and credit unions. Institutions that know the county often finance land that national lenders will not, and they may offer better terms on improved lots.
- Get the due diligence done first. A survey, a title search, zoning confirmation and a perc test protect both you and the lender, and a failed perc test can make a parcel nearly unbuildable.
- Keep property tax in the budget. Vacant land is still taxed every year, and that bill sits on top of the loan payment.
- Prepay principal when you can. Most land loans allow extra payments; on a balloon note every extra dollar shrinks the lump sum due at maturity.
Limitations and assumptions
- The rate is treated as fixed for the whole term. Adjustable or floating land loans will reset and change the payment.
- The calculator does not add closing costs, origination fees, appraisal, survey or title charges, or annual property tax on the parcel.
- Interest-only mode assumes the interest-only period runs for the whole selected horizon; loans that switch to amortizing after an initial interest-only stretch are not modeled.
- It does not check whether a lender would actually approve a given LTV or term. A 10% down payment on raw land will calculate fine but is rarely available.
- No construction draws, builder payments or the conversion to a permanent mortgage are included; those belong to a construction loan.
Land loan calculator vs. related tools
Use this page when you are buying a parcel and need the payment, the balloon and the total cost under land-loan terms. Use the Balloon Loan Calculator when the balloon note is on something other than land, the Interest-Only Calculator when the loan switches from interest-only to amortizing partway through, the Commercial Loan Calculator when the parcel is income-producing and the lender underwrites on a debt service coverage ratio, and the Mortgage Calculator once there is a house on the lot and taxes, insurance and PMI enter the payment.
Sources
- Consumer Financial Protection Bureau (CFPB) - What is a balloon payment? When is one allowed?
- Consumer Financial Protection Bureau (CFPB) - Owning a Home: loan basics and comparing offers.
- Payment, balance and interest figures use the standard amortization formula; no external rate data is assumed.
💡 Good to know
The balloon does not shrink much in the first years
On a 20-year amortization at 8%, five years of payments retire only 12.5% of the loan. If the plan is to refinance the balloon, expect to refinance nearly the full amount you borrowed.
Interest-only is a bridge, not a plan
Paying $750 instead of $1,075 a month on the example loan saves $325 monthly, but after five years you still owe every dollar of the $112,500. Use it only while you line up a build or a sale.
A larger down payment does double duty on land
It lowers the payment and the interest, and it is often what gets the loan approved in the first place. Lenders see a buyer with 25% or 30% in the parcel as far less likely to walk away.
⚠️ Common mistakes & edge cases
Treating the balloon payment as far away
A 5-year balloon on a 20-year schedule arrives with 87.5% of the loan still owed. Buyers who assume the balance will be "mostly paid down" by then are surprised by a $98,466 bill on the $112,500 example.
Comparing an interest-only payment with an amortizing one
$750 versus $1,075 a month is not a like-for-like comparison. One payment retires the loan in 15 years; the other leaves the full principal due at the end.
Entering a mortgage down payment on raw land
A 5% or 10% down payment will produce a number in the calculator, but lenders rarely accept it on vacant land. Model 20% to 30% unless you have a written quote for less.
Forgetting the cash that is not in the loan
Survey, perc test, appraisal, title, closing costs and annual property tax all sit outside the payment. A $37,500 down payment is not the whole cash requirement.
Choosing the longest term to get the lowest payment
Stretching $112,500 at 8% from 15 to 30 years cuts the payment by $250 but more than doubles total interest, from $81,020 to $184,675.
Signing a seller-financed note without running the numbers
Seller terms are negotiable and sometimes generous, but a high rate with a short balloon can cost more than a bank loan. Enter the seller's rate, term and balloon here before you agree.
❓ Frequently asked questions
How is a land loan payment calculated?
A land loan uses the same amortization formula as a mortgage: M = P x r x (1+r)^n / ((1+r)^n - 1), where P is the loan amount (price minus down payment), r is the annual rate divided by 12 and n is the number of monthly payments. On a $150,000 parcel with 25% down, the $112,500 loan at 8% over 15 years costs $1,075.11 per month and $81,020 in total interest.
How much down payment do I need for a land loan?
Lenders generally ask for a larger down payment on land than on a home because an empty parcel is harder to resell and produces no income. Many quote 20% to 25% for an improved lot and more for raw acreage, which is why this calculator defaults to 25%. On a $150,000 parcel, 20% down leaves a $120,000 loan at $1,146.78 a month over 15 years at 8%, while 25% down leaves $112,500 at $1,075.11, a difference of $71.67 every month.
What is the difference between a lot loan and a raw land loan?
A lot loan finances an improved parcel that already has road access and utilities (water, sewer or septic approval, power) and is usually ready to build on. A raw land loan finances undeveloped acreage with no improvements. Raw land is the riskier collateral, so lenders tend to require more money down, a shorter term and a higher rate. The calculator handles both: enter the terms you were quoted and compare.
What is a balloon payment on a land loan?
A balloon payment is the remaining balance that comes due in one lump sum before the loan is fully paid off. Land lenders often amortize the payment over 15 or 20 years but require the balance in 3, 5 or 7 years. On a $112,500 loan at 8% amortized over 20 years, the payment is $941.00 a month and the balloon after 5 years is $98,466, or 87.5% of the original loan.
How does the interest-only option work?
In interest-only mode you pay only the interest each month and the full principal is due at the end of the selected period. On a $112,500 loan at 8% the interest-only payment is $750.00 a month; after 5 years you have paid $45,000 in interest and still owe the entire $112,500. The amortizing payment over 15 years is $325.11 higher each month, but it retires the loan.
Can I get a 30-year land loan?
Some lenders offer 30-year terms on improved lots, but shorter terms of 5 to 20 years are far more common for land, and raw acreage is often limited to 10 or 15 years. A longer term lowers the payment and raises total interest: $112,500 at 8% costs $1,075 a month over 15 years with $81,020 of interest, versus $825 a month over 30 years with $184,675 of interest.
Why are land loan rates higher than mortgage rates?
Vacant land is riskier collateral than a house. It generates no income, can take longer to sell, and a borrower under financial stress is more likely to walk away from an empty parcel than from the home they live in. Lenders price that risk into a higher rate, a larger down payment and a shorter term. Because rates vary widely by lender and parcel type, this calculator does not assume a market rate; enter the quote you received.
Does the calculator include property taxes, closing costs or a survey?
No. It calculates the loan payment only. Budget separately for closing costs, an appraisal, a boundary survey, a percolation test if you plan a septic system, title insurance, and annual property tax on the parcel. Those costs do not change the amortized payment but they do change how much cash you need.
What happens when the balloon comes due?
You have three routes: pay the balance in cash, refinance the land into a new loan, or roll it into a construction loan when you build. Refinancing is never guaranteed, so lenders and the CFPB both advise having an exit plan before you sign a balloon note. The balloon schedule in the calculator shows the exact balance you will need to cover in each year.
Should I use a land loan or a construction loan?
Use a land loan when you want to buy the parcel now and build later, or hold it. If you already have plans and a builder, a construction-to-permanent loan can finance the land and the build together and convert into a regular mortgage when the house is finished. Many buyers use a short land loan with a balloon and then pay it off with the construction loan.
Is a land payment calculator the same as a mortgage calculator?
The math is identical, but the inputs are different. A land payment calculator is set up for the larger down payments, shorter terms, balloon notes and interest-only periods that are typical of lot and land financing, and it leaves out PMI, homeowners insurance and escrow, which usually do not apply to a vacant parcel.
How much is the payment per $10,000 borrowed?
At 8%, each $10,000 of land loan costs $202.76 a month over 5 years, $121.33 over 10 years, $95.57 over 15 years, $83.64 over 20 years and $73.38 over 30 years. Multiply by your loan amount divided by 10,000: a $64,000 lot loan at 8% over 15 years is 6.4 x $95.57, about $612 a month.