Commercial Land Loans Australia Between 6.40% - 15.00% And 50% - 70% LVR.

The maximum LVR for commercial land typically ranges from 50% – 70%, depending on several factors. DA-approved land in metropolitan areas can achieve up 70% LVR, while vacant land without development approval usually caps at 50-60% LVR. Your specific LVR will depend on the land’s zoning classification, DA status, location, your exit strategy, and development experience.

Land banking projects typically receive more conservative LVRs compared to sites with immediate construction plans. The calculator on this page helps you work out your borrowing power.

You don’t necessarily need DA approval, but it significantly impacts your borrowing capacity and interest rates. DA-approved land attracts higher LVRs (up to 70%) and better rates, whilst land without DA typically maxes at 50-60% LVR with higher rates.

Some lenders specialise in bridging finance for land with pending DA applications, structuring loans that increase the LVR once approval is granted.

If you’re purchasing land for subdivision or future development, we can arrange finance that aligns with your DA timeline. The key is demonstrating a clear pathway to either construction finance rollover or sale.

Yes, interest capitalisation is commonly available for commercial land loans and often necessary since vacant land produces no income to service repayments. Most non-bank and private lenders offer full interest capitalisation, whilst major banks may limit capitalisation periods or require evidence of strong income from other sources.

Capitalising interest means your monthly interest charges are added to the loan balance rather than paid separately, reducing cash flow pressure during the holding period. However, this increases your total interest cost and loan balance over time. We can structure your land finance to capitalise interest until DA approval or construction commencement, then refinance to a development loan with different terms.

Commercial land loans fund the land acquisition itself, whilst development finance funds the construction on that land. Many clients use a land loan initially, then refinance to comprehensive development finance once construction is ready to commence. We can arrange both facilities upfront with a clear pathway between them, ensuring seamless transition from land acquisition to construction commencement without reapplication stress.

Lenders require a clear, credible exit strategy demonstrating how the loan will be repaid within the 12-36 month term. The strongest strategies include: construction finance rollover (with preliminary lender approval), subdivision and staged sales (with feasibility study), development and sale (with market evidence), or land sale to developers (with comparable sales). Simply stating “we’ll hold and refinance” isn’t sufficient – you need supporting documentation like construction finance pre-approval, prestige buyer expressions of interest, or detailed feasibility studies showing development viability.

Land banking without definite plans receives much lower LVRs (50-55%) compared to DA-approved sites with construction rollover commitments (65-70%). We help articulate compelling exit strategies that maximise your borrowing capacity.

Contamination can significantly impact land finance, but it doesn’t automatically disqualify you. Lenders require Phase 1 Environmental Site Assessments for all commercial land purchases, with Phase 2 testing if contamination is suspected. Sites with manageable contamination (like minor hydrocarbon impact) can still secure finance if you provide a remediation plan and cost estimate.

Heavily contaminated sites requiring extensive remediation may need specialist private capital at higher rates and lower LVRs (40-50%). Budget for environmental reports ($2,000-$15,000 depending on site complexity) early in your due diligence, as results directly affect both LVR and interest rates. We work with lenders experienced in contaminated land finance who understand remediation pathways and development potential post-cleanup.

Commercial land typically requires 30-50% deposit depending on DA status and location. DA-approved land in metropolitan growth corridors may qualify for 30% deposit (30%), whilst vacant land without approvals often needs 40-50% deposit. This higher deposit requirement (compared to 20-30% for investment commercial property) reflects the higher risk of vacant land and lack of rental income for serviceability. Your deposit can come from cash savings, equity in existing property, director guarantees, or joint venture partners.

Some lenders accept “sweat equity” (your time and expertise) toward deposit requirements for experienced developers. Calculate your deposit requirements based on your specific land purchase, or speak with our team to explore creative deposit structures.