Rural property loan lenders?

6 posts

Member for

8 years 3 months
Last seen: 03/10/2016 - 22:11
Joined: 03/09/2016 - 20:08

Rural property loan lenders?

Can anyone recommend a good rural property loan lender? Trying for non income producing land (lifestyle block) 600acres
Last seen: 12/26/2018 - 09:21
Joined: 05/31/2011 - 09:44

Hi Bernie,

Welcome to the forum and thanks for the question.

All big four banks do rural loans, along with many of the second tier lenders, there are also specialised rural lenders like Rabobank.

If you have other loans, I would firstly check with that bank to see if they do rural loans. That way if you need to cross collateralise your security it will make it easier. If you are starting from scratch I would recommend a commercial/rural finance (not a home lender) broker who will be able to shop around and get you the best deal.

Most banks will lend 60% against a farm some will do up to 70% (suncorp). If you need income/profit from the farm to help with servicing of the loan a forecast cash flow and profit and loss statement will need to be completed.



Last seen: 07/06/2023 - 21:03
Joined: 04/05/2015 - 09:51
We just bought a property in May last year and the biggest trouble we had was getting finance. We had a lot of equity and saved $ for 7 years but the banks are very picky about lending. When we found our block, the bank wouldn't mortgage because it was 2 small lots and not a lot that was within the minimum size to build on thought they could be amalgamated to make 1 lot with a development approval. We found rural loan interest rates a lot higher than your usual mortgage up to 3% higher. We ended up using our equity so we had full control over what land we could buy, our farm property is not our primary residence. Most banks wanted minimum 50% deposit. Just my experiences with buying property.
Last seen: 03/08/2018 - 21:05
Joined: 03/22/2016 - 22:48



The best lender will be the one that offers a loan product compatible with your financial situation. The only real way to know is to have a discussion with a potential lender since everything is so dependent on your financial situation and the fact that loans are constantly changing.

In my personal experience the major banks (NAB, Commonwealth, ANZ and Westpac) are more flexible to your personal circumstances then second tier lenders (building societies etc). I've just been through this process and signed my mortgage documents today for a 108 acre property in NSW.

I can say that ANZ would only offer a residential loan for a property of up to 100 acres. A property of this size required a maximum loan to value ratio of 70% (30% deposit). This is due to banks being unable to get mortgage lenders insurance for large rural properties. Because of my particular financial situation ANZ was kind enough to bend this rule slightly to allow me to buy the property. It is likely that the other major banks would do the same if approached in a tactful manner.

I think it would be unlikely that any lender will offer a residential home loan for a property larger then 115 acres. Larger property sizes would require a commercial loan in which case a financial advisor (preferably an accountant specialising in rural businesses) should be consulted.

Depending on your personal circumstances it is likely for larger properties that it would be preferable to set up a primary producing business to take on the commercial loan. This would be done to put yourself in a better financial situation then if you took it on as an individual. Hence why I'd recommend the consultation of an accountant specialising in rural businesses to see whether this is suitable for your personal circumstances. I'm not confident that the majority of financial advisors would have the skill set to give decent advice on this matter. Accountants cost more but you get what you pay for.


Finally a disclaimer, I have very little experience in this area having just bought my first property with my first home loan. The information provided is just based on my observations and people reading this must seek financial advice before committing to any course of action.




Last seen: 03/08/2018 - 21:05
Joined: 07/22/2016 - 22:59

I recently got a verbal pre approval for a rural zoned 570 acre block  from the CBA @ home loan rates, over 3% less interest but needed 20% cash deposit not equity (I dont have my home mortgage with them) . They required a letter from the council comfirming that it could have a house built on it to achieve this (over 100 acres so it could), they said rural blocks normally are higher interest as they are regarded high risk but they didnt consider me a risk as I have been employed in the same job for 30 years so they would do it for me. As I said this was verbal but they took my details & recomfirmed a couple of days later that they would do it. Worth a try if you can do the same as I am no-one special just a blue collar worker.

Last seen: 03/08/2018 - 21:05
Joined: 11/10/2016 - 07:45

Hi Bernie,

Excellent question and the advice below is pretty good. But stay away from payday lenders, for a purchase like this, it would be useless and cost way too much.


Land that size will usually fall under the rural and have a lower LVR, 60-70% as previously discussed is right. This means that you need to have 30-40% in equity. This could be a combination of cash and security against other assets, shares are usually disregarded, but this can depend on the lender.


I am an accountant and can say that most of the big four banks would usually have a look. The basic approach they take is;

- What collateral do you have?

- What capacity do you have to  pay?

- What is your character like?


Sounds simple right?

The collateral looks at the banks security, this is built into the equity you will throw towards the purchase. At the end of the day, what can the bank take to mae sure they are not out of pocket.

The capacity looks at yoru ability to service the loan. More recently banks are assessing loans at a higher interest rate than actually advertised. For example, if the interest rate is 6%, they may assess the application based on 9% so make sure that you can still repay with interest rate rises.

As for character, it will look at your history, tax obligations, other loans etc. If you have a questionable history, it will increase their risk profile and therefore they will increase the rate in which they offer the funds.


As this will be a lifestyle block, the bank should have more sense than to ask you for any forecasts etc. so it will come down to largely the three items listed above.


The other frustrating thing is it depends on the banks appetite for the particular lend. I have had situations where i have referred a client to one of the lenders for a conversation and they got the deal done with no issues. A week later i have sent another client to the same bank, because they made it happen, and the bank's appetite for that lending had dried up. Fortunately, when one dries up, usually one of the others pick it up, its just knowing which one.


If you are in or around central Victoria, happy to throw some names out to you to make a couple of enquiries with and see if they can help. Being an accountant, i get enquires all the time. Might also pay to have a chat to a broker that has some business lending background. Due to the classification on the loan, it won't be treated as your standard residential loan, some brokers out there are pretty good at what they do, but just make sure you check their background, ideally someone from a business lending background will suit you best.


Best of luck with it.


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