Land Loan Payment Calculator
Estimate the monthly payment, total repayment and total interest of a land/plot purchase loan (amortising).
Input Data
Results
At a glance:The Land Loan Payment calculator estimates the monthly installment, total repayment and total interest for a term loan to buy land/plot/undeveloped land. Land loans are fixed amortising loans. Because land yields no rent and is seen as riskier, rates are usually higher and LTV lower/shorter than a mortgage.
Formula
Monthly rate r = annual ÷ 100 ÷ 12; total periods n = years × 12.
Monthly payment = loan × r × (1+r)^n ÷ ((1+r)^n − 1).
Total repayment = monthly × n; total interest = total repayment − loan.
$$r = \dfrac{\text{annual}\%}{12},\quad n = \text{years} \times 12$$$$\text{Monthly} = P \times \dfrac{r(1+r)^n}{(1+r)^n - 1}$$$$\text{Total interest} = \text{Monthly} \times n - P$$How to Use
- Enter the land loan amount.
- Enter the annual rate and term.
- View the monthly payment, total repayment and total interest.
Land loan HK$1,000,000 at 5.5% — monthly payment and total interest by term
| Term | Monthly | Total interest | Total repayment |
|---|---|---|---|
| 10 yr | 10,853 | 302,315 | 1,302,315 |
| 15 yr | 8,171 | 470,750 | 1,470,750 |
| 20 yr | 6,879 | 650,930 | 1,650,930 |
| 25 yr | 6,141 | 842,262 | 1,842,262 |
Case Studies
Case 1: Land loan vs mortgage — 2 pp gap, ~HK$184k more interest
A buyer borrows 1,000,000 for 15 years. Land loan at ~5.5% vs a built-property mortgage at ~3.5%.
Land loan 5.5%: monthly ~8,171, total interest ~470,750. Mortgage 3.5%: monthly ~7,149, total interest ~286,789.
Same principal and term, just ~2 pp higher on the land loan costs ~HK$183,961 more interest — reflecting land's higher risk and larger down payment. Count the higher financing cost into land purchase.
Case 2: 10-yr vs 25-yr term — over HK$540k interest gap
Same 1,000,000 at 5.5%, choosing 10 vs 25 years.
10 yr: monthly ~10,853, interest ~302,315; 25 yr: monthly ~6,141, interest ~842,262.
Lengthening to 25 years saves ~4,712/month but interest balloons by ~539,947. With affordable cash flow, a shorter term saves substantially long run.
FAQ
Why are land loan rates usually higher?
Land yields no rent or use income; if the borrower defaults, the lender finds it harder to realise value, so it is seen as higher risk. Hence land loans carry higher rates and lower LTV than residential mortgages, needing a larger down payment.
How does a land loan differ from a mortgage?
A mortgage is secured by a built property, with higher LTV, longer term and lower rate; a land loan is secured by undeveloped land, with weaker liquidity and realisation, so usually lower LTV, shorter term and higher rate.
How much interest does a shorter term save?
A shorter term raises the monthly payment but sharply cuts the interest-bearing period, lowering total interest. If cash flow allows, a shorter term is usually cheaper; a longer term eases the monthly burden but raises total interest — watch the overall cost.
In Hong Kong, what LTV and term for buying land (farm/village land)?
Land loans in HK are relatively special financing, stricter than residential mortgages. Land (especially undeveloped farmland, green belt, village land) yields no rent and may be restricted by deed and planning, with weaker liquidity, so lenders see higher risk: (1) lower LTV — residential mortgages reach 60–90%, but pure land is much lower, needing a larger down payment; (2) shorter term — not always 20–30 years like residential; (3) higher rate — reflecting the risk premium. If the land involves farmland-to-residential, village rights or deed-use issues, banks are more cautious, sometimes via finance companies or development loans. Actual amount, term and rate vary widely by land nature, location, your income and credit. When estimating with this calculator, reserve a larger down payment and consult a bank or mortgage broker on the specific land.
Is land-loan interest tax-deductible; how does it differ from owner-occupied mortgage interest relief?
In HK, the salaries-tax 'home loan interest deduction' has clear conditions: the property must be your HK self-occupied residence, a residential property, and the loan used to buy that residence. A loan purely to buy 'land/undeveloped plot' usually does NOT qualify (no habitable residence yet) and cannot be deducted. Note: if you later build and occupy a residence on that land, qualifying home-loan interest may then be deductible (within statutory caps and term limits); if the land is for rent/investment, the interest follows a different rule (profits tax/property tax, not the home-loan deduction). Tax is complex and depends on use and personal circumstances; this calculator only handles payment amounts. Check IRD's latest rules or a tax professional.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.