From a bank’s point of view, vacant land is a riskier type of security than a normal house or unit.

Lenders are also conservative when assessing low doc loans so when you tell them that you’re buying land, it may be the straw that breaks your application.

How much can I borrow?

As a general rule, normal sized blocks of land in metropolitan areas are fine for most of our lenders and you can borrow a maximum of 80% of the value of your land.

It’s the regional, rural and remote locations that can be difficult to finance, which tends to reduce your borrowing power to 60% (or less).

Does the size of my land matter?

Yes, the larger your land is the more difficult it is to finance.

  • Up to 2 hectares: You can borrow up to 80% of the value of your land.
  • 2 – 11 hectares: You can borrow up to 80% of the value of your land, through some lenders only.
  • 11 – 50 hectares: You can borrow up to 60% of the value of your land, through some lenders only.
  • Over 50 hectares: You can borrow up to 50% of the value of your land on a case by case basis.

Please call us on 1300 889 743 or enquire online to find out if we can finance your land.

Will the bank force me to build?

The majority of lenders will require you to start building on your land within two years. Many people do not intend to build on their land but instead want to hold onto it for the future.

In these cases we can help you find a lender that does not have any construction time frame restrictions.

What happens when you decide to build?

When you do decide to build, your land loan will be converted into a low doc construction loan. This is a simple process whereby we submit a loan increase to your lender along with the council approved building plans, specifications and building contract.

If your lender doesn’t lend for the type of construction you have chosen then we can refinance your loan to another lender that will help.

What if you can’t access your land?

Lenders will not lend a cent against a property unless it has good access. If you have to go through a neighbour’s land to get to your property, then no lender can help you unless there is some sort of legal right of access to your property.

From a lender’s point of view, nobody would want to buy a block of land that can’t be accessed!

Some properties which are remote and only accessible by forest track through crown land, such as a state forest, are more difficult to finance.

However, if there is legal access that does not rely on a lease that could theoretically be cancelled, then we can arrange a low doc loan for most self employed borrowers.

If your property can only be accessed by a dirt road that is poorly maintained, then during bad weather your land may become completely inaccessible! The majority of banks will decline home and investment loans with these properties as security.

Does the zoning of the land matter?

Land inside major capital cities and regional locations would have a standard residential zoning. This is acceptable to almost all lenders. Rural areas have zonings such as rural-residential, rural and farm zoning.

The majority of low doc lenders will lend for rural residential properties as long as they are in a major town with a population of more than 5,000 people. Rural and rural-residential zoned land in areas outside of major towns can be financed as long as they do not exceed 50 ha.

Farm zoned land is much more difficult. If the property is not being used as a farm and can be used for normal residential housing then there is normally no problem. Low doc loans are generally unavailable for land that can only be used as a commercial farm.

Will I pay a higher rate because I’m buying land?

Almost all of our lenders have the same interest rate for land and construction low doc loans as they do for normal low doc loans.

Why not check out our competitive low doc interest rates?

What are the common pitfalls?

Many lenders will not accept acreage sized vacant land. Try to buy a smaller block.

The majority of non-conforming lenders will not accept vacant land as a security. This means it can be extremely difficult to purchase vacant land if you have a bad credit history.

The non-conforming lenders that do accept vacant land will not, however, accept construction as a low doc loan purpose. You will need to refinance when you decide to build.

How do I apply for a vacant land low doc loan?

Our mortgage brokers are experts in low doc financing. Send us an online enquiry or call us at 1300 889 743 and we will be in touch with some free quotes from leading bank and non-bank lenders that specialise in low doc and lite doc lending.

  • Gabriella

    Hello, does any bank provides low-doc loan for the vacant land?

  • Hi Gabriella, some banks that do low doc loans would do a low doc loan for vacant land as well however they lend very cautiously. Also the size of the land, and zoning of the land among others are taken into consideration.

  • o’brien

    So what type of construction projects can the lender accept to be financed?

  • Hello o’brien,

    Lenders can accept the construction of duplexes, four units on one title, granny flats, weekenders / holiday homes as well as small developments.

  • luke

    My cousin told me that his uncle got a home loan using the income from his previous job. I’m in a similar situation where I just started a business. Old job’s income was great so can I declare that to help me with my loan?

  • Hi luke,
    The idea behind this method of verifying your income is that you’re already experienced in this line of work and could always go back to it if your business doesn’t work out. One of our lenders may be able to use the income from your most recent job. As a general rule you must meet the following criteria:
    – Your business must be in the same line of work as your last job.
    – Your business must be less than 18 months old.
    – You must show that your business is currently trading.
    – Ideally, your business should be in a service industry with low expenses.
    – You must be borrowing less than 80% of the value of your property.

  • Cooper

    I lent my cousin $18,500 a few weeks back. I still have $10,000 in savings. Will that amount be considered genuine savings when I get paid back? I saved that myself along with the $10k and I can prove it.

  • Hi Cooper,
    In most cases, the amount that you’re claiming to be your own savings will be assessed as a gift or loan from your cousin. If you have bank statements and a statutory declaration to prove that you did save the funds then we may be able to get them to consider this as an exception. However, it’s likely we can just go with a lender that doesn’t require genuine savings and you’d get approved at a great rate.

  • Koopa

    Can anyone get approval for a low doc construction loan as long as they have an acceptable project and can service?

  • Actually, most banks will only lend for your project if you have those plus a licensed builder with Home Warranty Insurance (HWI) or your state equivalent. Banks want the security offered by a formal building contract backed by insurance.

  • Struck

    What exactly is a loan splitting feature and how is it of any use?

  • Hello Struck,

    This feature allows your loan to have multiple loan accounts. The most common use of this is for people to setup a loan as half fixed, half variable. This allows them to make extra repayments on the variable portion, however to partially protect themselves from rising interest rates. You can also use multiple loan accounts to keep track of loans used for different purposes.

  • Alexandria

    I own a 2 acres of land in Mundaring worth $200,000 and I have a $95,000 mortgage on it. I want to build a home and construction costs will be $300,000 so I need less than 80% of the overall cost as a low doc home loan. Can you guys help me on this?

  • Hi Alexandria, the land size is fine and while not every lender does a low doc loan for construction, there are a few options available especially because you’re borrowing less than 80% of the property value (80% LVR). We should be okay to help you so please give us a call on 1300 889 743 and we’ll complete a full assessment.