Land mortgages in Ontario

Purchasing vacant land can be an excellent investment however getting finance or a mortgage to purchase the vacant land can take some additional steps. It is important that you are aware of the issues that you could have when purchasing undeveloped vacant land so that will be able to get approve for a mortgage and you will not miss any opportunities. 


Down-payment required to purchase vacant land in Ontario.

Down payment to purchase vacant land in Ontario can range from 20% to 50% of the purchasing price. The percentage of down payment required will vary depending on the location of the land, what you are planning to use for it, if the land can be served from utilities companies and from your overall net-worth and your credit score.

Find out how much you really need as down-payment for vacant land mortgages in Ontario.


Fees required to purchase vacant land in Ontario.


  1. Appraisal Fee – You will need an appraisal for the lender. Usually appraisal start from $300 and up.
  2. Legal Fees – from $2000
  3. Land Transfer Tax applies in Ontario. Your lawyer should be able to provide you with more details on the land transfer fees for vacant land.
  4. HST/GST may apply when you are purchasing a vacant lot
  5. Mortgage brokerage fees may apply in cases where the lender does not compensate mortgage brokers

Possible issues to address when getting a vacant land mortgage in Ontario.

1) Check the zoning with the town or the city where the land is located to make sure that it is zoned for what you are planning to do with it. Changing zoning can take a very long time and it can be expensive.

2) Farm land can have different rules and attract different kind of lenders for mortgages. 

3) Check if you land can be service by major utility companies (hydro, water, septic, internet etc.)

4) Check if your land is close by any industrial plan which could mean that the lender may ask for a environmental report.

5) If you are looking to build on the vacant land it is a good idea to have some initial drawing of your project

Frequent questions when getting vacant land mortgages in Ontario?

How do I determine the price of vacant land in Ontario?

Usually a good starting point to determine the value of vacant land is to see which are other land lots were sold in the pas. A real estate agent can offer you the tools to do a lot of research to help determine the value of the land. Another option is to obtain a professional appraisal.

Can I get pre-approved to get a mortgage for vacant land in Ontario?

Yes you can get pre approved on a mortgage to purchase vacant land in Ontario but in most cases you should still put a financing condition so that the lender will be able to review the land that you are purchasing before giving you the final ok.

Can I get combine the mortgage to get financing for construction for whatever I want to build on the vacant land?

Yes you can get a construction mortgage at the same time when you purchase the land but will need property plans and construction mortgage are usually provided ins stages depending on what you are building. 



Types of Land Mortgages and Interest Rates for purchasing vacant land in Ontario

There are several type of mortgages available to purchase vacant land in Ontario. The requirements change depending of what kind of land your purchasing and where the land is located and how large is the lot.

Also you may get a better rate if you already have your plans to what you want to build in the land and you combine a construction loan with the mortgage required to purchase the land.

Click here to to get a quote on mortgage rates to purchase vacant land in Ontario.

Suggestions for purchasing vacant land in Ontario

1) Do your due diligence on the vacant land that you want to purchase – check if utilities companies can serve the lot and if not if a well and a septic system can be put in place. 

2) Ask the seller if he/she is willing to provide you with a Vendor  Take Back loan on it for part of the value of the land. This sometime can help with the down payment.

3) Check too see if a manufactured home can be placed in the vacant land while you build your dream property.

4) Use the equity of your home to purchase the land.

5) Check the adjacent properties to make sure that there no industrial sites or gas station that may have polluted the vacant land your are planning to purchase.

6) If possible try to get a construction loan at the same time as you purchase the vacant land. This could hep you get approved and lower your interest rate.

7) Consider private lenders. Often when you get a mortgage from a private lender you will pay an high interest rate and fees abut you may be able to get an interest only mortgagee with less strict requirements then the banks.