Land Loan Payment Calculator — Raw Land Financing
Calculate monthly payments on a land loan: enter the purchase price, down payment, annual interest rate, and loan term to see the payment schedule, total interest, and full cost breakdown.
%
years
Fixed monthly principal + interest payment for the land loan
230,234.67
Total costDown payment
13%
Principal
52.1%
Interest
34.8%
- 1
Loan amount
150,000 − 30,000 = 120,000 - 2
Monthly interest rate
r = 7.5% ÷ 12 ÷ 100 = 0.00625 - 3
Number of payments
n = 15 × 12 = 180 - 4
Growth factor
(1 + r)ⁿ = 1.00625ⁿ = 3.0695 - 5
Monthly payment
120,000 × 0.00625 × 3.0695 ÷ (3.0695 − 1) = 1,112.41
How does this calculator work?
Monthly payment = P × r(1+r)ⁿ / [(1+r)ⁿ−1], where P is the land loan amount (purchase price minus down payment), r is the monthly rate, and n is the months. Land loans typically require 20–50% down and carry higher rates than home mortgages. Enter your numbers to see total interest and payment schedule.
Formula
How this is calculated
Land loans (also called lot loans or raw-land loans) are used to purchase undeveloped parcels without an existing home. They work differently from conventional mortgages: lenders view raw land as higher-risk collateral because there is no structure to repossess and the parcel may have uncertain value, utility access, and zoning. As a result, land loans typically carry higher interest rates (often 1–3 percentage points above comparable home-mortgage rates), require larger down payments (commonly 20–50% of purchase price), and have shorter terms (typically 10–15 years, compared to 30 years for a home mortgage).
The monthly payment formula is the standard amortizing loan formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan amount (price minus down payment), r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). Each payment covers accrued interest first, then reduces the principal — a process called amortization.
This calculator uses US-style fully-amortizing loan math. Rates and terms shown are editable estimates and vary by lender, borrower creditworthiness, land type, and region. Some lenders offer interest-only land loans or balloon structures not modelled here — consult a lender for specific product details.
Frequently asked questions
Raw land is illiquid and harder to value than a home with a structure. If the borrower defaults, the lender cannot sell the parcel as easily as a completed home. Lenders compensate for this extra risk with higher rates and require larger down payments to reduce their exposure from day one.
Most banks and credit unions require 20–50% down on raw land, compared to as little as 3–5% for a conventional home mortgage. Owner-financed land deals and USDA farm loans can sometimes offer lower down payments for qualifying buyers.
Yes — once you are ready to build, many lenders allow you to roll the land loan into a construction loan, which finances building costs and eventually converts to a permanent mortgage. This can reduce closing costs versus taking separate loans at each stage.
Also known as
TG we-Calculate Editorial Team. (2026). Land Loan Payment Calculator — Raw Land Financing [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/land-loan-payment-calculator
TG we-Calculate Editorial Team. "Land Loan Payment Calculator — Raw Land Financing." TG we-Calculate. 2026. https://we-calculate.com/calculator/land-loan-payment-calculator.
TG we-Calculate Editorial Team, "Land Loan Payment Calculator — Raw Land Financing," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/land-loan-payment-calculator
@misc{wecalculate_land_loan_payment_calculator, title = {Land Loan Payment Calculator — Raw Land Financing}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/land-loan-payment-calculator}}, year = {2026}, note = {TG we-Calculate} }
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