Can you get a mortgage for vacant land in Canada?

Yes, but options are more limited than for a home purchase. For serviced lots (municipal water, sewer, road), several major banks and credit unions offer vacant land mortgages with 20%–25% down. For raw or unserviced land, financing is harder — most major banks require 25%–50% down, and some will not finance raw land at all. Credit unions and alternative lenders tend to be more flexible. CMHC mortgage insurance is not available for vacant land, so you always need at least 20% down.

How much down payment do you need to buy land?

Minimum down payment for vacant land is typically 20%–25% for a serviced lot and 25%–50% for raw or unserviced land. There is no 5% down option as there is for an existing home — CMHC does not insure vacant land mortgages. Some private lenders will finance with lower down payments but at significantly higher interest rates (8%–14%). The exact requirement depends on the lender, the type of land, and whether you plan to build immediately.

What is the interest rate on a vacant land mortgage?

Interest rates on vacant land mortgages are typically 0.5%–2.0% higher than standard home mortgage rates. In 2026, this means approximately 5.5%–7.5% for institutional lenders on serviced lots. For unserviced or recreational land, rates may be higher. Private lenders charge 8%–14%. Credit unions often offer the most competitive rates for land purchases, especially in rural areas where they have more experience with the product.

What is the difference between a vacant land mortgage and a construction mortgage?

A vacant land mortgage finances only the purchase of the land — you own the land and decide when (or if) to build. A construction mortgage finances both the land and the building, with funds released in stages (draws) as construction progresses. If you plan to build within 12–24 months, a combined lot-and-construction mortgage is usually the better option — rates are typically lower, and you only go through one approval process. If you are buying land as a long-term hold or have no immediate building plans, a standalone land mortgage is appropriate.

Will a bank give me a mortgage on raw land?

Most major banks will not finance truly raw land (no road access, no services, no clear building potential). However, they will finance land that has road access and the potential to be built upon, even if it is not currently serviced. Credit unions — especially regional ones in rural areas — are generally more willing to finance land in varying stages of development. For truly raw or speculative land, you may need to use a private lender, seller financing, or cash.

Can You Get a Mortgage for Land in Canada? Vacant Land Loans Explained (2026)

Financing a vacant land purchase in Canada is possible but more complex than buying an existing home. Here is a detailed guide to your options.

Vacant land financing overview

Feature	Vacant Land Mortgage	Standard Home Mortgage
Minimum down payment	20%–50% (depending on land type)	As low as 5%
CMHC insurance	Not available	Available (< 20% down)
Interest rates	0.5%–2% higher than home rates	Standard posted rates
Amortization	Typically up to 25 years	Up to 25 years (30 with 20%+ down)
Lender options	Fewer — not all banks offer this	Widely available
Appraisal	Required — can be challenging for raw land	Standard process
Term	1–5 years typical	1–10 years

Down payment requirements by land type

Land Type	Minimum Down Payment	Typical Lender
Serviced urban lot	20%–25%	Major banks, credit unions
Serviced suburban lot	20%–25%	Major banks, credit unions
Rural lot with road access	25%–35%	Credit unions, some banks
Rural lot (well/septic needed)	25%–35%	Credit unions, select banks
Raw land (no services)	35%–50%	Credit unions, private lenders
Recreational / seasonal	25%–50%	Credit unions, private lenders
Agricultural land	25%–50%	FCC, credit unions, ATB
Waterfront lot	25%–35%	Credit unions, some banks

Lender options

Major banks

Bank	Vacant Land Lending	Down Payment	Notes
TD	Yes (serviced lots)	25%	Must be buildable; some branches more flexible
RBC	Limited	25%+	Depends on the lot and location
BMO	Limited	25%+	More restrictive on raw land
Scotiabank	Limited	25%+	Select markets only
CIBC	Limited	25%+	Not widely promoted

Credit unions (often the best option)

Credit Union	Strengths	Notes
ATB Financial (Alberta)	Strong rural and acreage lending	Very experienced with land
Servus Credit Union (Alberta)	Flexible on rural properties	Competitive rates
Vancity (BC)	BC-focused, flexible	Good for island and rural BC
Island Savings (BC)	Vancouver Island specialist	Recreational and rural land
Desjardins (Quebec)	Quebec’s largest financial co-op	Strong land lending in Quebec
Meridian (Ontario)	Ontario’s largest credit union	Serviced and some rural lots
Alterna (Ontario)	Ontario	Flexible on land
Various local credit unions	Regional expertise	Often the best option for rural land in their area

Farm Credit Canada (FCC)

Feature	Details
What they finance	Farmland, agricultural land, rural properties
Down payment	25%+
Terms	Flexible — up to 25-year amortization
Best for	Farmers and agricultural operations
Not for	Speculative land purchases or urban lots

Private lenders

Feature	Details
Down payment	25%–40%
Rate	8%–14%
Term	Usually 1–3 years (short-term)
Best for	Bridging to construction, land that banks won’t finance, fast closing
Fees	Lender fees of 1%–3% of the loan amount
Exit strategy	Must have a plan to refinance or pay off within the term

Financing strategies

Strategy 1: Combined lot + construction mortgage

Feature	Details
How it works	Single mortgage covers land purchase and construction
Down payment	20%–25% of total project cost (land + construction)
Advantage	One approval, one set of fees, construction rate (not land rate)
Lender	Banks and credit unions that offer construction mortgages
Requirement	Building plans, contractor, and timeline must be ready
Best for	Buyers who plan to build within 6–12 months of purchasing the land

Strategy 2: Buy land with cash, then get a construction mortgage

Feature	Details
How it works	Use savings or HELOC to buy land outright; later apply for construction mortgage
Advantage	Simpler land purchase; more time to plan before building
Disadvantage	Capital is tied up in the land
Construction mortgage	Lender appraises land + planned construction; advances draws against total value
Best for	Buyers with significant savings or equity in an existing property

Strategy 3: HELOC against existing property

Feature	Details
How it works	Borrow against equity in your current home to purchase land
Rate	Prime + 0.5%–1% (variable)
Advantage	No land-specific mortgage approval needed; flexible repayment
Disadvantage	You are using your home as collateral
Maximum	Typically 65%–80% of your home’s value minus existing mortgage
Best for	Homeowners with significant equity who want flexibility

Strategy 4: Seller financing (vendor take-back)

Feature	Details
How it works	Seller acts as the lender — you make payments to the seller over an agreed term
Down payment	Negotiated (often 10%–30%)
Rate	Negotiated (often 5%–10%)
Term	Usually 1–5 years, with a balloon payment at the end
Advantage	No bank approval needed; flexible terms
Disadvantage	Seller must agree; higher rates; balloon payment risk
Common for	Rural land, recreational land, situations where bank financing is unavailable

What lenders evaluate for land mortgages

Factor	What They Look For
Zoning	Is the land zoned for your intended use?
Road access	Legal, year-round access to a maintained road
Services	Municipal water/sewer or feasibility of well/septic
Buildability	Can a home be built on this lot? (Soil, slope, environmental constraints)
Location	Rural vs urban — proximity to amenities
Appraised value	An independent appraisal of the land’s market value
Your financials	Credit score, income, debt ratios — standard underwriting
Your building plans	Lenders are more comfortable if you have a plan to build

GST/HST on vacant land

Scenario	GST/HST?
Buying from an individual (resale)	Generally no GST/HST
Buying from a developer/builder	GST/HST applies (5%–13% depending on province)
Buying from a business that subdivided	GST/HST likely applies
Agricultural land from a non-registrant	Generally exempt
New subdivision lot	GST/HST applies — rebate may be available if building a primary residence

Tips for financing a land purchase

Talk to credit unions first — they are often more flexible than major banks for land financing
If you plan to build soon, use a combined lot + construction mortgage — better rates and one approval process
Get a soil test before buying if you need well or septic — a failed soil test can make the lot unbuildable
Confirm zoning before financing — lenders will not finance land that cannot be built upon
Budget for total project cost, not just the land — servicing, construction, permits, and GST/HST can add significantly
Consider seller financing for rural or recreational land where bank financing is difficult
Have an exit strategy if using private lending — plan how you will refinance within 1–3 years
Get your building plans ready before applying — lenders are more willing to lend when you have a clear plan