Loans · Business
Commercial land loan calculator.
See the down payment, the loan payment and what it costs to carry vacant or commercial land while you hold it. The loan-to-value is yours to enter; the tool does not assume what a lender offers on land.
The land and loan
Down payment and carrying cost
Method and limitations
Formulas: loan = price × loan-to-value; down payment = price − loan. Monthly payment uses the per-payment rate (1 + r/m)m/12 − 1 and the amortization formula P × i / (1 − (1 + i)−n), or P × i if interest-only. Carrying cost per year = 12 payments + property tax + other costs. The balance at the end of the hold is what remains after those payments.
Worked example: $800,000.00 of land, 50% loan-to-value, 7.5% compounded semi-annually, 20-year amortization, 3-year hold. The loan is $400,000.00, the down payment $400,000.00, and the payment $3,194.41 a month. With $6,000.00 of property tax and $2,000.00 of other costs, carrying the land costs $46,332.90 a year ($3,861.08 a month). After 3 years $370,577.30 is still owing.
Semi-annual default: section 6 of the Interest Act says a mortgage on real property repaid by blended payments must state the rate “calculated yearly or half-yearly, not in advance”. Choose monthly if your lender states it that way.
What this is not: land transfer tax, legal fees, development costs, environmental work and lender fees are not modelled, and nothing here says how much a lender will lend against land. Ask the lender for its loan-to-value and rate.
FAQ
How much is the down payment on a commercial land loan?
The price minus the loan. At 50% loan-to-value on $800,000.00, it is $400,000.00. The loan-to-value is an input because it depends on the lender and the land.
What does it cost to hold land each year?
Loan payments plus property tax plus other costs. In the example $46,332.90 a year.
Can I model interest-only payments on a land loan?
Yes, tick the interest-only box. The balance stays at the full loan amount.
Why is there a balance at the end of the hold?
The loan is amortized over a longer period than you hold the land, so the remainder is repaid on sale or refinancing.
Does this include land transfer tax?
No. Land transfer tax depends on the province and sometimes the municipality; use the land transfer tax calculators on this site.
Sources
- Interest Act, section 6 (Justice Laws Website), retrieved October 2026
Disclaimer
Estimates only, not financial, legal or tax advice, and not a quote or an approval. Confirm every rate, fee and term with your lender and your agreement.