Hello,
I am a working clinical psychologist who is looking to purchase a decent 30-hectare large hobby farm around the outskirts of Townsville. I wanted to know how much I can borrow to purchase a rural property of this size.
What do banks think about hobby farms?
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Otto Dargan
- Mortgage Specialist
- Posts: 7319
- Joined: Sat Sep 06, 2008 5:55 pm
- Location: Sydney, Australia
- Contact:
Re: What do banks think about hobby farms?
Hey Megan,
Welcome to the forums.
When it comes to hobby farm loans, lenders will typically allow you to borrow 90% of the property value or 90% LVR (Loan To Value Ratio).
However, if the location is considered a restricted postcode, your borrowing power may be restricted to 80% LVR.
Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will let you know which lenders have the most flexible policy when it comes to acreage loans.
Check out the for more details.
Cheers,
Otto
Welcome to the forums.
When it comes to hobby farm loans, lenders will typically allow you to borrow 90% of the property value or 90% LVR (Loan To Value Ratio).
However, if the location is considered a restricted postcode, your borrowing power may be restricted to 80% LVR.
Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will let you know which lenders have the most flexible policy when it comes to acreage loans.
Check out the for more details.
Cheers,
Otto
Re: What do banks think about hobby farms?
Hey,
Thanks for the prompt response. It really helped. I know that hobby farms shouldn’t generate any sort of profit or be used for any commercial basis. But I also wanted to know what items I would be allowed to own if I were to own hobby farm. At what point does a hobby farm become a commercial farm?
Thanks for the prompt response. It really helped. I know that hobby farms shouldn’t generate any sort of profit or be used for any commercial basis. But I also wanted to know what items I would be allowed to own if I were to own hobby farm. At what point does a hobby farm become a commercial farm?
-
Otto Dargan
- Mortgage Specialist
- Posts: 7319
- Joined: Sat Sep 06, 2008 5:55 pm
- Location: Sydney, Australia
- Contact:
Re: What do banks think about hobby farms?
Hello Megan,
Excellent question.
Truth be told, there isn’t really a fixed barrier that separates hobby farms from commercial farms.
We would suggest you send us the link to the property’s listing in a real estate website so that our team can assess it. Only then can we provide you with accurate information.
Some of the factors responsible for separating commercial farms from hobby farms could be whether:
- The land has large crop plantations.
- The property has cattle and how many heads of cattle there are.
- There is a residential property on the land.
- There are otherwise signs of large scale agricultural activities.
Cheers,
Otto
Excellent question.
Truth be told, there isn’t really a fixed barrier that separates hobby farms from commercial farms.
We would suggest you send us the link to the property’s listing in a real estate website so that our team can assess it. Only then can we provide you with accurate information.
Some of the factors responsible for separating commercial farms from hobby farms could be whether:
- The land has large crop plantations.
- The property has cattle and how many heads of cattle there are.
- There is a residential property on the land.
- There are otherwise signs of large scale agricultural activities.
Cheers,
Otto
Re: What do banks think about hobby farms?
Thank you for assisting me through this decision. I will take all the information you’ve provided me into consideration while making my decision. Hopefully, I can reach out to Home Loan Experts within the next few months to take this forward.
Regards,
Megan Monohan
Regards,
Megan Monohan
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