How vacant land loans work
A land loan is a mortgage secured by a vacant block, used to buy it now and build later or to hold it. Because there is no house to value or rent out, lenders ask for a bigger deposit, often charge a higher rate, and sometimes require you to build within a set period. This guide covers the deposit and LVR limits lenders publish, the build-by rules, when a combined land and construction loan is the better product, and what ANZ, NAB, Gateway, Greater Bank, ORDE and Brighten publish.
- Bigger deposit: NAB publishes 20% to 30% as typical; ORDE and Brighten publish a 75% LVR cap on residential land (70% for non-residents at Brighten, 65% for commercial land at ORDE)
- Build-by rules: NAB publishes deadlines of two to five years at some lenders; ANZ may require a build within a specified time; Greater Bank publishes no obligation to start on a standalone land loan
- Higher rates than a home loan because there is no dwelling and no rent (NAB, Credit Connect); ANZ tiers its land loan discounts at 60% and 80% LVR
- A combined land and construction loan can reach 90% for an owner-occupier with LMI (Greater Bank), with the first drawdown buying the land
- Equity in your current home can fund the block instead (Greater Bank, ORDE); the 5% Deposit Scheme covers vacant land with a build contract
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are based on a secured loan of $30,000 over 5 years for vehicle finance and $50,000 over 5 years for equipment finance, as required under the National Credit Code.
What is a land loan?
NAB's definition: a land loan is a type of mortgage designed for buying vacant land, which often has stricter conditions and higher interest rates because vacant land is considered riskier. Credit Connect spells out the risk from the lender's side: there is no structure generating rental income, no established property to value easily, and in many cases no clear timeline for development, so the assessment is more cautious than for a standard mortgage. ANZ publishes that a land loan can be combined with a construction loan when it comes time to build, and Greater Bank publishes the feature that makes a standalone land loan attractive: unlike a construction loan, you do not have to start building as soon as you buy.
How much can you borrow against land?
| Lender | LVR or deposit as published | Who it is for | Notes |
|---|---|---|---|
| NAB (guide) | Lenders often require 20% to 30% deposit for vacant land | General guidance | Independent valuation usually required |
| ORDE | Up to 75% LVR residential; up to 65% LVR commercial land | Owner-occupiers and investors; purchase, refinance or equity release | Up to five years interest-only |
| Brighten | Maximum 75% LVR; 70% for non-residents | Purchase or refinance of vacant land | Monthly repayments by direct debit; document checklist published |
| Greater Bank (guide) | Up to 90% with a construction loan alongside, for an owner-occupier, with LMI | Buyers with a build planned | Equity in an existing home can be used |
| ANZ | Discounts tiered at 60% or less and 80% or less of the property value | Owner-occupiers and investors | Interest-only option; may require a build within a specified time |
| Gateway Bank | Publishes an owner-occupied vacant land loan; terms not fetched | Owner-occupiers | — |
Checked against each lender's published page on 20 September 2026; "Not published" means the page does not state it. The lender values the land independently, and NAB publishes that the valuation has to support the loan amount, so a block bought above the valuer's figure needs a bigger deposit to close the gap. Size and location matter: acreage, rural zoning, no sealed road access or no services can push a block outside a bank's residential policy and into the non-bank lenders or a lower LVR.
Do you have to build, and by when?
It depends on the product. NAB publishes that some lenders may impose building deadlines, typically within two to five years. ANZ publishes that it may require you to build your home or investment property within a specified time. Greater Bank publishes that one of the major benefits of a land loan is that you do not have to start building on your land as soon as you buy it, and that some people hold land as an investment without building. Ask the question directly before you sign, and ask what happens at the deadline: usually a review, sometimes a requirement to refinance or repay.
Land loan or a land and construction loan?
| Feature | Standalone land loan | Land and construction loan |
|---|---|---|
| Suits | Buy now, build later; holding the block | Plans and a builder ready to go |
| LVR | Lower: 70% to 80% at most lenders; 75% at ORDE and Brighten | Up to 90% for an owner-occupier with LMI (Greater Bank) |
| Rate | Usually higher (NAB) | Home loan construction rates; interest only on drawn funds |
| Drawdown | Full amount at settlement | First drawdown buys the land, then staged progress payments (Credit Connect) |
| Build deadline | Sometimes, two to five years (NAB) | Built into the loan; the build is expected to start |
| Converting later | Refinance into a construction loan when ready | Reverts to a standard home loan on completion |
The construction loans guide covers the progress payment process, and the owner-builder guide covers the tighter terms if you will manage the build yourself.
What the lender checks, and what it costs
NAB's list: valuation, credit score and income stability, existing debts and spending, and your plan for the land. Greater Bank adds the block itself: proximity to a river, coastline or bushfire zone, and whether builders and machinery can get in. Brighten publishes its document checklist, three months of bank statements for PAYG borrowers and two years of financials, tax returns and the latest assessment for the self-employed. On costs, NAB publishes that site preparation, utility connections and legal and council fees often add thousands on top of stamp duty; the stamp duty calculator gives the duty on land by state, and first home buyer concessions apply to vacant land in some states when you build a first home on it. The 5% Deposit Scheme covers building on vacant land with a contract to construct, which is the low-deposit route for a first home buyer with a house-and-land package.
Using your home's equity instead
If you already own a home, the cheapest way to buy a block is often not a land loan at all. Greater Bank publishes that you may be able to use the equity in your home to finance a land loan, and a top-up or equity split against the house borrows at home loan rates with the house as security, which sidesteps the land LVR cap and the rate premium. ORDE publishes the reverse, releasing equity from land you already own. A broker prices both against a standalone land loan, and Your Finance Guide refers you to one licensed broker partner for that; we do not lend or assess applications ourselves.
Land and building guides
From the block to the build.
Land loan FAQs
Do banks lend money for vacant land?
How much deposit do I need for vacant land?
Do I have to build within a set time?
Land loan or a land and construction loan?
Are land loan interest rates higher?
What will the lender check?
Can I use equity in my home to buy land?
What other costs are there?
Buy the block on the right loan
Tell us the land, whether you plan to build and when, and we refer you to one licensed broker partner who compares a land loan, a land-and-construction loan and an equity top-up on total cost. Free for borrowers, no obligation.