Vacant Land Loan

Starting your journey to owning a piece of the Australian dream begins with one step: buying the land. Vacant land loans give you a customized way to finance the perfect amount of land for your dream home or business. With many years of experience in the Australian finance market, we’re dedicated to helping you understand the tricky parts of vacant land loans. This way, you can make intelligent decisions supporting your project’s success.

No Doc and No Credit Checks

Same Day Approvals for Qualified Applicants

Fast Vacant Land Loan

Flexible Terms

Low Interest Rates

Serving since 2001

Lending Services Available Across Australia

Transform empty spaces into promising ventures with our vacant land loans. Enjoy a blend of competitive rates, flexibility, and customized loan structures, ensuring your property aspirations are achieved.

What is a Vacant Land Loan?

As the name implies, a vacant land loan is a specific type of home loan designed for those who aim to acquire a plot of land without an existing property. The primary intention is usually to construct a home or business premises on the land, although the timeline for construction is not strictly defined. This distinguishes vacant land loans from other mortgages usually attached to an existing residential or commercial property.

How do Vacant Land Loans Work in Australia?

In Australia, vacant land loans function in a manner that is quite similar to conventional home loans. When an individual applies for such a loan, the lending institution thoroughly analyses the individual’s financial standing, also known as their ‘borrowing power’. This analysis considers the individual’s income, assets, and any existing debts or liabilities. The higher the individual’s income and assets, the lower their debts, and the higher their borrowing power is likely. This means they could secure a larger loan amount. However, it’s important to remember that each lender has different criteria and methods for evaluating an applicant’s borrowing power.

Furthermore, not only does the applicant’s financial situation play a crucial role in the application process, but the specific attributes of the land itself are also evaluated by the lender. These characteristics can include the overall size of the land, its location, and how accessible it is in terms of infrastructure, such as roads and utilities. For instance, a plot of land located in a prime area with excellent accessibility to infrastructure may be viewed more favourably by lenders. In addition, the intended use of the land also impacts the lender’s decision. If an applicant wants to build a house on the land, the application may be deemed less risky than if the land is intended for investment purposes. This difference is due to the perceived stability associated with owner-occupied properties compared to investment properties, which may have more variable returns.

Requirements and Criteria: How to Apply?

Each lender has a unique set of criteria, but generally, they will lend up to 90-95% of the property’s value if the land is within 11 hectares. A minimum deposit of 20% is typically required for lands larger than this. Essential documents for application include identification proof (such as a passport, birth document, or driver’s license), income proof (like payslips and tax returns), a detailed report of monthly expenses, and records of current assets and outstanding debts. Please note that this list is not exhaustive, as lenders’ requirements vary.

Applying for a vacant land loan involves understanding the factors influencing the lender’s decision. Before approval, financial institutions examine your income, expenses, assets, and outstanding loans to determine your borrowing power. They will also consider the size and location of the land, its proximity to essential infrastructure, and the intended purpose of the land purchase.

Different Types of Vacant Land Loans

There are several types of vacant land loans, each tailored to different needs and circumstances. Some loans offer the flexibility of interest-only payments during the initial years, while others allow additional repayments without penalties. However, it’s essential to differentiate vacant land loans from construction loans. The latter requires the building to be constructed within a set period (usually one to three years), while the former does not impose such a constraint.

Interest-Only Vacant Land Loans

These loans can offer significant financial flexibility to borrowers, especially in the initial years of the loan term. With an interest-only loan, borrowers must pay only the interest on the loan amount for a specified period, usually a few years. This arrangement allows for lower monthly payments at the beginning of the loan term, which can be particularly beneficial for those with tighter budgets or fluctuating incomes.

Vacant Land Loans with Extra Repayment Options

These loans are tailored for borrowers who wish to pay off their loans faster and save on interest. They allow for additional repayments without attracting any penalties. By making extra repayments, borrowers can reduce the principal amount more quickly, thereby decreasing the total amount of interest payable over the life of the loan.

It’s essential to thoroughly evaluate each option and understand their implications before deciding on the most suitable loan type for your needs.

Understanding the Key Differences Between Vacant Land Loans and Construction Loans

It’s crucial to recognize the distinctions between vacant land loans and construction loans within the Australian market. These two types of loans are designed to cater to unique needs and circumstances.

When opting for a construction loan, the borrower commits to initiating and completing the construction of a building within a specified timeframe. Generally, this period spans one to three years, although the duration is contingent upon the lender’s stipulations. This means you must start building within the given timeline, and any deviation from this schedule can lead to complications or penalties.

On the other hand, vacant land loans offer more flexibility. These loans cater specifically to the purchase of vacant land, with no requirement for immediate construction. Therefore, if you’ve found the perfect plot for your future dream home but are still deciding whether to start building, a vacant land loan could be your ideal solution.

Advantages and Disadvantages of Vacant Land Finance


Vacant land loans have numerous benefits, making them a potentially appealing option for individuals or businesses seeking to purchase a parcel of land for future development:

  • Flexibility: One of the significant advantages of vacant land loans is that they offer flexibility in terms of construction planning. Unlike other financial products, like construction loans, which impose a stipulated timeline for building completion, vacant land loans do not have such a requirement. This flexibility allows you to purchase a piece of land without needing to build on it, giving you ample time to strategize and plan the construction according to your pace and preference.
  • Land Ownership: Another notable benefit of vacant land loans is that they enable you to secure land ownership. Most standard home loans require that a house be included in the purchase. With vacant land loans, you can purchase the land independently, presenting an opportunity to secure a coveted plot for future development without immediate construction obligations.
  • Potential Value Appreciation: Land is a tangible asset that can appreciate over time. By securing a vacant land loan, you can invest in a piece of land that could increase in value, providing potential financial gain.



Despite these benefits, vacant land loans also have some drawbacks that borrowers should carefully consider before proceeding:

  • Lower LVR: Lenders approach vacant land loans cautiously, typically offering lower maximum Loan-to-Value Ratios (LVRs) than other loan types. This caution means you need a larger deposit upfront to secure the loan approval. Therefore, it requires prospective borrowers to have substantial savings or other sources of funds.
  • Requirement for Additional Loan: Once you decide to start building on the land, you must secure a separate construction loan. This requirement could mean dealing with another round of applications, approvals, and potential conditions, adding to the overall complexity of the process.
  • Possibility of Increased Costs: Owning vacant land can come with costs, including council rates, land taxes, and maintenance expenses. These costs could accumulate over time, especially if there are delays in the construction process. Therefore, considering a vacant land loan is essential to factor in these potential expenses.

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Success Stories: Case Studies

We’re delighted to have assisted numerous clients throughout Australia with our vacant land loan services. From bustling urban centres like Melbourne, Sydney, and Perth to quieter locales like Adelaide and Canberra, our services have proven beneficial. Our clients have successfully navigated their land purchase journey, underscoring the value and effectiveness of our financing solutions for vacant land acquisitions.

Case study: Vacant land loan for an individual in Melbourne

A Melbourne-based client was eyeing a plot of land for his future home. He approached several banks for a vacant land loan but faced several hurdles. Frustrated, he turned to us, and with our efficient and dedicated team, his loan was approved within three working days. Now, thanks to our expedited service, he is a step closer to building his dream home.

Case study: Vacant land loan for a business in Sydney

Similarly, a Sydney business owner experienced delays with traditional banks when securing a loan for a vacant land purchase. When he contacted us, we swiftly assessed his situation and connected him with a suitable lender from our network. The loan amount was in his account within two business days, enabling him to proceed with his business plans swiftly.

The Bottom Line: It Vacant Land Loan worth Borrowing?

Opting for a vacant land loan depends on individual circumstances and objectives. These loans provide flexibility and the opportunity to secure land for future construction. However, they also require careful planning and understanding of the lending criteria. As experts in the Australian finance landscape, we can guide you through the process, helping you weigh the pros and cons to make the best decision for your situation.

Frequently Asked Questions (FAQs)

How much can I borrow?

Depending on the lender and other assessment factors, you can typically borrow up to 95% of the land’s value.

What is the minimum deposit required?

The deposit required for a vacant land loan varies depending on the price of the property and the lender’s LVR policy.

What is the interest rate?

Interest rates for vacant land loans are comparable to standard home loans. However, the exact rate will depend on various factors, including the lender and the assessment process. For the best interest rates, feel free to contact us.

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