Land Loan Calculator
Land Loan Payment Calculator
What Is a Land Loan?
A land loan finances the purchase of raw land, a lot, or rural acreage. Unlike mortgages for improved residential property, land loans are considered higher risk by lenders because vacant land generates no income and is harder to sell in foreclosure. This results in higher interest rates (typically 1–3% above residential mortgage rates), shorter loan terms (10–20 years vs. 30), and larger required down payments (20–50%). Defaults model a $150,000 parcel with $30,000 down (20%), 7.5% annual rate, and 15-year term — producing a monthly payment of approximately $1,188.
How Land Loan Payments Are Calculated
Monthly Payment (M) = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1], where P = principal, r = periodic rate (annual rate ÷ 12), n = total periods. The Advanced Options panel enables interest-only periods (common in construction land loans where only interest is paid while entitlement or construction occurs before switching to amortization) and payment frequency (monthly, bi-weekly, or weekly — bi-weekly payments reduce interest by the equivalent of one extra monthly payment per year). The amortization chart tracks the declining loan balance and cumulative interest paid over the full term.
Understanding Your Results
The primary result shows your periodic payment. The 3-stat bar shows principal, total interest, and total cost. The breakdown table lists every component including the down payment percentage, interest-only payment if applicable, total interest, and total amount paid. The line chart shows how the outstanding balance decreases over time and how cumulative interest accumulates. The "Interest / Principal" ratio in the Summary Statistics shows how much extra you pay in interest relative to the original loan — for land loans, this is often 60–80%+ of the original principal due to higher rates and shorter terms.
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