What are land loan rates in 2026, and what do investors actually pay?

What are land loan rates today, by lender type?

The first thing that sets a land loan rate is who is lending. In the first week of October 2026, banks and credit unions that publish their land and lot rates were showing about 7.25 to 9 percent. Their annual percentage rates (APRs), which fold in the lender’s fees, ran about 7.6 to 9.35 percent.

Those are posted rates for the best files; one bank’s land sheet says its rates assume a 780 credit score. Your quote can sit above them, and an investor may not qualify at all.

• Banks: about 7.25 to 9 percent posted in early October 2026, on 10 to 20 year terms, often adjustable or with a five year balloon.
• Credit unions: about 7.5 to 9 percent posted the same week, on terms mostly of 5 to 20 years, and often for personal use only.
• Farm credit lenders: roughly 6.5 to 8.5 percent in 2026, for rural land and rural borrowers.
• Seller financing: most often about 6 to 10 percent in 2026 guides, which disagree at both ends.
• Private lenders: about 8 to 15 percent plus points, interest only, for 6 to 24 months.

What do banks and credit unions charge for a land loan?

Posted bank rates in the first week of October 2026 ran from 7.25 percent, on an adjustable building lot loan, to 8.875 percent, on a fixed land loan with a five year balloon. Credit union rates ran from 7.5 percent on a 15 year fixed loan to 9 percent APR on 10 and 12 year loans.

Read the eligibility lines before the rate. Three of the credit union land pages checked limit the loan to personal or non-commercial use, and several cap the parcel at 5 to 20 acres and the loan at $100,000 to $300,000. An investor buying a lot to build on and sell is often outside the product, whatever the rate says.

These loans are also shorter than they look. One Florida credit union’s fixed lot loan is paid as if over 20 years but falls due in full at year five, and a Washington bank’s land loan works the same way. Others are adjustable: one bank’s hold the rate for three years, then reset every year.

What do farm credit lenders charge for land?

Farm credit lenders are borrower-owned cooperatives chartered under the federal Farm Credit Act and supervised by the Farm Credit Administration. One 2026 guide puts their rural land pricing at roughly 6.5 to 8.5 percent and another at 1 to 2 points below conventional banks. One cooperative’s published lot loan example on October 1, 2026 was 8.10 percent APR, with no balloon.

When an association is profitable it may pay borrowers a patronage refund, a share of its earnings that lowers the effective rate after the fact. Eligibility is narrow, though: federal rules aim these lenders at farmers, ranchers and rural homeowners, and their rural home lending is limited to open country and towns of 2,500 people or fewer. A lot in a city subdivision bought to build and sell generally falls outside what they do.

What interest rate does a seller charge to finance land?

Seller financing has no rate sheet; the rate is whatever the buyer and the seller agree. Published 2026 guides most often put it at about 6 to 10 percent, but they disagree: one puts the range as low as 4 percent, and a land retailer that sells parcels on terms quotes 8 to 15 percent for raw land.

The usual shape is a note of three to ten years, often ending in a balloon. A seller who wants a higher price can offer a lower rate to get it, so compare price and rate together.

What do private lenders charge on a land loan?

Private lenders price higher and lend shorter. Published 2026 guides put private land loans at roughly 8 to 15 percent and disagree on where most loans land: one says 12 to 15 percent with 2 to 4 points, another 8 to 14 percent with up to 3 points plus an origination fee.

The structure is much the same across them: interest-only monthly payments, a term of 6 to 24 months, and the whole balance due at the end. The same guides put private advances on land at about 50 to 60 percent of value, one going to 70.

The higher price buys a different test: a private lender reads the parcel and the exit more than a credit box built for owner-occupants.

Why are land loan interest rates higher than mortgage rates?

Three reasons, all about what happens if the loan goes wrong. First, the agencies that buy home mortgages do not buy land loans. Fannie Mae’s Selling Guide says it does not purchase or securitize mortgages on vacant land or land development properties, so a lender that makes a land loan keeps it on its own books and prices it that way.

Second, bank regulators give raw land the lowest loan to value limit in their real estate lending guidelines: a supervisory limit of 65 percent for raw land and 75 percent for land development, against 85 percent for improved property and no set limit for an owner-occupied home. Third, land earns nothing and can be slow to sell, so a lender that takes it back may wait a long time to be repaid.

Published guides put the gap at roughly 1 to 3 points over a comparable home mortgage, and one puts it at 2 to 4. In the week of October 1, 2026, the weekly national survey had the 15 year fixed home mortgage at 6.60 percent, while 15 year fixed land rates posted by banks and credit unions ran about 7.5 to 9 percent.

Are raw and vacant land loan rates higher than lot loan rates?

Yes, usually by a point or two. One bank’s published sheet on October 5, 2026 priced a 15 year building lot loan at 7.25 percent with 20 percent down, and a 10 year raw land loan at 8.25 percent with 40 percent down, with margins of 4 and 5 points over its index.

Two 2026 guides agree on the direction and roughly on the size: one puts improved lots at 7.5 to 9 percent and raw land at 9 to 12, the other improved land at 6.5 to 8.5 and raw land at 8 to 10.

The words matter. A lot loan usually means a platted lot with a road and utilities at or near it. Vacant land is the broad term, unimproved land generally has road access but no utilities, and raw land has neither. The further a parcel is from being ready for a house, the higher the rate and the shorter the term.

What moves the land loan rate you are quoted?

Lenders print what moves their price. One bank’s land sheet lists points, loan amount, loan to value, credit, property type and occupancy; private lending guides add borrower experience.

• The land. Raw, unimproved or improved, as above, and whether access and utilities are in place.
• Down payment and loan to value. More cash in lowers the lender’s risk. One credit union asks 20 percent down on its fixed lot loan and 35 percent on its cheaper adjustable one.
• Term and balloon. Shorter fixed terms are cheaper. Three published sheets checked in October 2026 priced a shorter term below a longer one, by about 0.2 to 0.5 of a point.
• Fixed or adjustable. An adjustable rate starts lower and resets. One credit union’s land loan resets yearly at the one year Treasury bill rate plus 2.75 points.
• Credit. At banks and credit unions it is a gate and a price: minimum scores of 640 to 680 are common, and posted rates assume the top tier. Private lenders weigh the parcel and exit more.
• Use. Personal use or investment decides which products you can get at all.

Land loan rates and terms: what comes with the rate?

On a short land loan the rate is only part of the cost. Get each of these in writing before you compare offers.

• Points and origination. A point is 1 percent of the loan, paid at closing. At banks and credit unions the fees show in the gap between rate and APR: one credit union’s 8.000 percent lot loan carries an 8.902 percent APR. Private land loans commonly carry 1 to 3 points, and one land guide quotes 2 to 4.
• Third-party costs. Appraisal, title search and insurance, document preparation and recording, which one credit union lists as the borrower’s cost.
• Prepayment terms. Many bank and credit union land pages state no prepayment penalty. Private loans vary: some carry a penalty or a minimum interest period, so ask what you owe if you sell in month three.
• The balloon. If the loan is paid as if over 20 years but due at year five, most of the principal is still owed at the end, as the example below shows.
• Extensions. If a short private loan runs past its term, extending it costs a fee plus continued interest. Guides quote anywhere from a quarter point to a point per month, or one to two points per extension.

Land loan calculator: how do you work out the payment by hand?

A land loan calculator does one of two sums, both easy on a phone. For an interest-only loan, the monthly payment is the loan times the annual rate, divided by 12. A $200,000 loan at 12 percent is $200,000 × 0.12 ÷ 12 = $2,000 a month, and the full $200,000 is still owed at the end. For a Florida lot, the Florida land loan calculator runs both sums and adds the state’s closing taxes.

For an amortizing loan, the payment is L × r ÷ (1 − (1 + r) to the power of −n), where L is the loan, r is the monthly rate and n is the number of monthly payments. Take $100,000 at 8 percent over 20 years: r is 0.08 ÷ 12 = 0.006667, and n is 240.

• Raise 1.006667 to the 240th power: about 4.927.
• Divide 1 by that: 0.2030. Subtract it from 1: 0.7970.
• Multiply the loan by the monthly rate: $100,000 × 0.006667 = $666.67, which is also the first month’s interest.
• Divide: $666.67 ÷ 0.7970 = about $836 a month.

What does a five year balloon mean for the payment?

Add a five year balloon to that same loan. After 60 payments of about $836 you have paid about $50,200, and you still owe about $87,500, because most of each early payment is interest: $667 of the first $836.

That $87,500 is the number to plan around: a sale, a refinance or a building loan has to cover it by month 60, on whatever terms exist then.

How do you compare two land loan offers?

Compare total dollars over the time you will actually hold the loan, not the two rates. Take a $200,000 private land loan, interest only, offered two ways, with illustrative numbers inside the published ranges above.

• Offer A: 11 percent and 3 points. $6,000 at closing, then $1,833 a month.
• Offer B: 12.5 percent and 1 point. $2,000 at closing, then $2,083 a month.
• Held 6 months: A costs $17,000 in points and interest; B costs $14,500.
• Held 18 months: A costs $39,000; B costs $39,500.
• B is $4,000 cheaper at closing and $250 a month dearer after it, so A only wins if you hold past 16 months.
• The rule behind it: points spread over your hold. Two points over 6 months add about 4 points a year to the cost; over 24 months, about 1.

What are land loan rates in Florida, and what is different there?

Florida’s posted rates sit in the national band: two Florida credit unions posted land and lot rates of 8 to 9 percent in the first week of October 2026. What differs is the law around the rate and the taxes on the loan.

Florida caps interest. Under sections 687.02 and 687.03, Florida Statutes, a rate above the equivalent of 18 percent a year simple interest is usurious on a loan of $500,000 or less; above $500,000 the line is 25 percent, the rate in section 687.071, which also makes it a crime to willfully and knowingly charge more than 25 percent.

For the cap, Florida counts more than the stated rate. Section 687.03(3) spreads charges that are in the nature of interest, which can include origination fees and points, over the stated term: 2 points on a 12 month loan add 2 to the rate, and the same 2 points on a 6 month loan add 4. Which charges count on a given note is a question for a Florida attorney.

Florida also taxes the loan at recording: documentary stamp tax of 35 cents per $100 on the note or mortgage (section 201.08) and a one-time intangible tax of 2 mills on the amount secured (section 199.133). On a $200,000 land loan that is $700 plus $400, cash due at closing that no rate comparison shows.

What to do before you ask for a land loan quote

Price the parcel and the plan before the rate. Five steps, in order.

Entrusted Capital is a direct lender that makes land loans with its own capital, lending in Florida first. Terms come from the person underwriting the file, not a calculator, and a quote starts with a soft pull.

• Name the land: raw, unimproved or a finished lot, with the distance to power and water, and whether access is recorded.
• Decide the hold: months to a sale or to a building loan. It decides whether points or rate matter more.
• Check eligibility first: personal use only, acreage limits, loan size limits, rural only.
• Ask every lender for the same list: rate, points, every fee, term and balloon, prepayment and extension terms.
• Work out each offer’s total cost over your hold with the sums above; in Florida, add the taxes on the loan.