Buying land in 2025 is a different process than getting a traditional mortgage. Land loans often come with higher down payments, stricter requirements, and unique repayment structures. Choosing the right bank can save you thousands over the life of the loan. This guide highlights the best banks and lenders for land loans in 2025, their rates, and common repayment options so you can compare and plan confidently.
Why Compare Banks for Land Loans?
Unlike home loans, land financing is considered riskier by lenders. That means:
- Interest rates are usually higher than mortgage rates.
- Down payments can range from 20% to 50%, depending on land type.
- Repayment terms are shorter, often 10–20 years.
Comparing banks helps you find the balance between lower rates, higher loan-to-value (LTV), and flexible repayment options.
Top Banks and Credit Unions Offering Land Loans in 2025
Here are some of the most competitive lenders for land financing this year:
| Institution | Rate Range (2025) | Max LTV | Terms Available | Repayment Options |
|---|---|---|---|---|
| Old National Bank | 4–6% | 80% | 15–20 years | Fixed & balloon |
| WaFd Bank | 4.5–7% | ~70% | Up to 20 years | Fixed |
| AgSouth Farm Credit | Varies | 85% | 20 years | Flexible terms |
| RBFCU | ~5–7% | Up to 100% on some lots | 10–20 years | Fixed & interest-only |
| Oregon State CU | Starting 5.15% | 80% | 15 years | Fixed |
| Horizon Farm Credit | Competitive | N/A | Up to 20 years | No prepay penalty |
👉 You can model monthly costs using the Land Loan Payment Calculator before applying.
Repayment Options Explained
When comparing banks, repayment structure matters as much as interest rate.
Fixed vs Adjustable Rates
Most banks offer fixed rates on land loans, giving predictable payments. Adjustable-rate loans are rare and usually tied to construction financing.
Balloon Payments
Some banks (like Old National) allow balloon structures — smaller monthly payments during the term, with the balance due at the end. This lowers upfront cost but requires planning for a large payoff or refinance.
Interest-Only Options
A few lenders, including RBFCU, provide interest-only repayment for the first years. This can ease cash flow while you prepare to build but doesn’t reduce principal.
Factors That Affect Rates in 2025
- Land type: Raw land is riskier, so expect higher rates and larger down payments. Improved or residential lots often qualify for better terms.
- Credit score: A 700+ score usually gets access to the best rates.
- Down payment: Putting 30–40% down can reduce interest costs.
- Lender type: Farm Credit institutions and credit unions often beat big banks on flexibility.
Alternatives to Banks
If traditional banks don’t meet your needs, consider:
- Farm Credit cooperatives – specialize in agricultural and recreational land, often with flexible underwriting.
- Credit unions – community-based lenders that sometimes allow higher LTVs.
- USDA rural development loans – for land tied to housing in eligible rural areas.
👉 Start planning with the Land Loan Payment Calculator or estimate upfront fees using the Land Loan Closing Cost Calculator.
FAQs About Land Loan Banks in 2025
Which banks have the best land loan rates in 2025?
Regional lenders like WaFd and credit unions such as RBFCU often post the most competitive rates, while Farm Credit institutions offer flexible repayment terms.
Can I get 100% financing on land?
It’s rare, but RBFCU and some credit unions occasionally offer it for residential lots. Raw land almost always requires 20–50% down.
What credit score do I need?
Most banks look for 640–700+, though stronger credit can reduce your rate by 1–2 points.
Do banks offer interest-only land loans?
Yes, but limited. RBFCU and certain co-ops allow interest-only for the first years.
Are repayment terms shorter than mortgages?
Yes, land loans are usually capped at 15–20 years, compared to 30 years for mortgages.
Tracey is the creator of LandLoansCalculator.com, a trusted resource for accurate and easy-to-use land loan calculators. With a strong focus on clarity and reliability, Tracey is dedicated to helping users understand land financing with confidence. Her goal is to simplify complex calculations so buyers, investors, and professionals can make informed decisions quickly and efficiently.