Land Loan: Vacant-Land Requirements for Brokers

A land loan finances the purchase of vacant land, with the land as security and building costs funded separately or through an agreed construction facility. You can buy land before you have a building contract, provided the lender accepts the block and your plans for it.

For a broker, the assessment starts with the land’s zoning, services and title. The deposit then depends on the accepted value and lending limits, while the intended building date must fit the loan’s conditions.

Describe the Land Accurately

Record the block’s zoning, area, legal access, utilities and title conditions alongside the client’s intended residential use. A listing that calls land a “home site” doesn’t establish permission to build or acceptance as residential loan security.

Collect the sale contract, title search and subdivision plan before comparing lenders. If the subdivision isn’t registered, record the expected title date and settlement trigger. Ask the client’s conveyancer to explain restrictions that affect ownership or future building.

Fact to record	Evidence to collect	Why it changes the assessment
Exact zoning and intended use	Council planning map, scheme provisions and any written planning advice	A dwelling may need approval or be prohibited under the applicable zone
Area and location	Title, survey plan and property address	Lenders apply land-size limits and location restrictions
Legal and physical access	Registered access rights and road details	A visible track doesn’t establish a legal right to reach the land
Services	Provider confirmation of connections or proposed alternative services	Services available nearby may still require connection work and expense
Title restrictions	Title search, easement documents and restrictive covenants	Restrictions can affect the building location or design
Buildable area and site costs	Building envelope, soil information and builder’s site-cost estimate	The usable area and cost of preparing it affect the later build budget

In Western Australia, a local planning scheme’s map and text work together to control land use. The state’s planning system guide explains how local governments assess development under those schemes. Use the terminology and decision-making authority for the property’s own state and council.

A building envelope is the part of a block within which a house can be built. Western Australia’s vacant-land buying guide also warns that sewerage easements can affect development even when absent from the title. Obtain utility information as well as a title search.

A Serviced Lot and an Unserviced Rural Block

Consider two hypothetical blocks, each priced at $350,000. The suburban lot is 600 square metres, with a registered title, road access and connected electricity. Water and sewerage connections are documented, and the planning scheme permits the proposed residential use subject to its requirements.

The rural block is four hectares, reached by a track across a neighbour’s property. Electricity isn’t connected, and the buyer expects to install tank water and a septic system. The title and planning records haven’t yet established a dwelling site or legal access.

The same purchase price doesn’t give these blocks the same lending prospects. The rural file needs evidence of access rights and permitted use, plus a budget for services. Its area also exceeds the AMP Land Loan limit described below.

The rural property loan guide covers the additional acreage and rural-security questions. Keep the actual zoning in the file even if the client intends to use the block only as a home.

Check Lender Acceptance

Match the block and building timetable to a lender’s land-only rules before treating a home-loan product as an available option. Security acceptance and the client’s ability to afford repayments both matter. A large deposit doesn’t resolve prohibited use or unacceptable access.

NAB’s buying-land guide, as at October 2026, identifies residential zoning, road access and valuation as assessment factors. It also describes checks on income, debts and spending. Assess the repayments while the block produces no rental income, including the client’s existing housing costs.

Published Land-Only Routes

These lender examples show why the intended use and security details belong in the first enquiry.

• ANZ’s Land Loan page, as at October 2026, covers buying land before building a home or investment property. ANZ can impose a period within which the borrower must build.
• Westpac’s construction-loan page, as at October 2026, directs buyers without a building contract to a regular home loan without its construction option.
• Commonwealth Bank’s 10 July 2025 prefab brochure illustrates buying vacant land with a land loan before financing a prefab build. That example doesn’t establish acceptance of every vacant block.

AMP’s broker policy, as at October 2026, limits its Land Loan to 2.02 hectares. Residential, rural residential or rural zoning is required, with all-weather road access and connected electricity. The land must be standalone security, without cross-collateralisation, which means securing the loan against multiple properties.

AMP caps the loan at $600,000 in its location risk Zones 1 and 2, $400,000 in Zone 3 and $200,000 in Zone 4. Its maximum loan-to-value ratio (LVR) is 90% for principal and interest repayments and 80% for interest-only repayments. LVR is the loan divided by the lender’s accepted property value.

AMP’s Land Loan excludes the hypothetical four-hectare block. These limits apply to AMP, not every lender.

Work Out the Deposit and Settlement Funds

The cash needed is the purchase price less the approved loan, plus purchase costs and any separately payable insurance premium. The lender’s accepted value can be lower than the price, leaving a larger cash gap.

In this hypothetical AMP Zone 3 example, an eligible block costs $450,000 and the lender accepts a value of $430,000. Assume the borrower passes the income assessment.

At 90% LVR, the loan is $387,000, below the $400,000 location cap. The buyer contributes $63,000 towards the purchase before other costs. Interest-only repayments reduce the maximum loan to $344,000 at 80% LVR, requiring $106,000 towards the price.

Neither calculation includes transfer duty, conveyancing, lender fees or lenders mortgage insurance (LMI). LMI protects the lender if the borrower defaults. Add the actual applicable costs to the settlement budget, and distinguish the contract deposit already paid from the remaining cash needed.

A first-time land buyer still needs land security accepted under the chosen facility. Buying an empty block doesn’t itself establish eligibility for assistance intended for a completed first home.

For a lender shortlist, your broker can use Bulma to compare vacant-land policies and retain the quoted lender wording with the file. The property facts still need to match the loan application and valuation.

Plan the Later Build

Set out the proposed building date and each applicable deadline before the client commits to a land-only purchase. Separate the lender’s conditions from developer covenants, planning approval expiry and the later construction offer’s deadlines.

Record what starts each clock, such as land settlement, the construction offer or the first construction drawdown. A long land-loan term doesn’t establish permission to postpone building for that whole term.

Pre-Approval and Planning Can Expire

Land-loan pre-approval covers the assessed circumstances and its stated conditions. It doesn’t reserve future construction finance. If title registration or building is delayed, income and debts can change alongside lending policy and the property’s value.

ANZ’s 20 November 2017 land-buying guide explains reassessment after unregistered land receives its title. It identifies changes to income, expenses, interest rates and property values as risks between the deposit and settlement. Use the expiry date in the actual approval when planning that gap.

Record the zoning and intended dwelling in the valuation instructions, including any unresolved planning condition. If the council must approve a dwelling location or access arrangement, obtain its decision before relying on that outcome. A lender exception can’t grant planning permission.

In Western Australia, the planning system guide explains that development approvals can be conditional and time-limited. Record the conditions and expiry on the property’s actual approval. If the build is delayed, resolve an extension with the relevant planning authority before treating that approval as current.

Interest-Only Conditions and the Repayment Change

Interest-only land loans require their own eligibility and period checks. Paying interest leaves the principal outstanding, so budget for the repayments when principal must also be repaid.

ANZ’s land-loan footnote, as at October 2026, limits interest-only periods on its Standard Variable and Fixed Land Loans to three years for owner-occupiers. For residential investment land loans under those products, the limit is one year. Its longer general home-loan interest-only periods don’t replace those land-specific limits.

ANZ’s page says the rate switches to the applicable variable principal and interest rate after the interest-only period. Minimum repayments can increase. If the planned build falls after that date, assess the client’s ability to meet the repayment change while continuing to hold the land.

Record whether the intended exit is construction finance, repayment from other funds or sale. If the later loan is declined, the borrower still owes the land debt. Don’t base the holding strategy on an automatic refinance or unapproved extension.

Refresh the File Before Construction Finance

Refresh the client’s income evidence, living expenses and liabilities when applying for the additional borrowing. Update the land-loan balance and funds available for the build. Include service connections and site preparation in the budget, alongside the building contract’s inclusions and exclusions.

For ANZ, as at October 2026, holding the land mortgage doesn’t remove the need to meet construction-finance eligibility. Its construction-loan page describes adding construction funds or keeping separate loans, subject to those criteria. A new lender will also need to address the existing land mortgage.

Prepare the current building contract, plans and specifications for the construction application and valuation. Include the required planning approvals and evidence that their conditions are satisfied. The construction valuation must reflect the proposed improvements, rather than assuming the land-only value proves the finished project’s value.

ANZ requires the first construction drawdown request within six months of receiving its Letter of Offer. The build must finish within 24 months of the first drawdown. These are construction-facility deadlines, separate from the land purchase and its conditions.

The construction loan requirements guide covers the later facility and building-stage evidence. Before choosing the land loan, show the client the cash needed at settlement and the cost of holding the block through their intended building date.