Land Mortgage Calculator – Loan-to-Cost Planner
Plan a land mortgage with loan-to-value targets, cash requirements, and monthly payment details.
Estimates are for planning only and do not represent an offer of credit or investment advice. Verify rates, terms, and closing costs with your lender.
Table of Contents
How to Use
- Enter the land purchase price and any development or entitlement budget you plan to finance.
- Choose the loan-to-value percentage, interest rate, and loan term offered by your lender.
- Add optional closing costs and contingency reserves to reflect total cash required.
- Click Calculate to view monthly payments, loan amount, down payment, cash required, and total interest.
Loan-to-cost vs. loan-to-value
Land mortgages are often structured using either loan-to-value (LTV) or loan-to-cost (LTC) ratios. LTV compares the loan to the appraised value of land plus improvements, while LTC compares the loan to your actual project budget.
- For raw land, lenders frequently cap LTV at 60‑70% and may require LTC equity for planned improvements.
- Lower leverage can improve approval odds and reduce interest costs when it is time to roll into construction financing.
What lenders evaluate
- Project feasibility: zoning status, access to utilities, and entitlement progress.
- Exit strategy: plan to refinance with construction debt, sell improved land, or build-to-suit.
- Liquidity: cash reserves for closing costs, contingencies, and interest carry.
- Experience: prior development history and ability to complete the proposed scope.
Planning liquidity
Land mortgages can require significant upfront cash even if the majority of costs are financed. Reserving funds for contingencies and soft costs keeps your project moving if bids increase or timelines slip.
- Track total cash committed (down payment + closing + contingency) vs. interest paid over time.
- Stress-test the loan with higher interest rates or longer hold periods to ensure reserves are adequate.
- Coordinate land financing with future construction or take-out loans so you are never over-levered during the transition.
Frequently Asked Questions
- How much can I borrow against land?
- Many lenders finance 50‑70% of the land value and a similar percentage of approved improvement budgets. Use the loan-to-value slider to see how different leverage levels affect monthly payments and cash required.
- Can the development budget be financed?
- Some land mortgages allow you to roll engineering, entitlement, or off-site improvements into the loan. Others may require you to fund those costs from cash. Enter the development budget to see how total project cost and down payment change.
- When should I transition to construction financing?
- Once permits, plans, and bids are finalized, many borrowers refinance the land loan into a construction loan. Modeling both the cash required and total interest helps ensure you have enough liquidity to bridge the gap between land closing and vertical construction.
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