Land is one of the harder things to finance. Most residential lenders are set up for a house on a normal lot. Once you are looking at vacant land, a hobby farm with a barn and some acreage, or a working farm, many of them either decline or lend only against the house and a small piece of land around it. The answer is usually not “no”, it is “wrong lender”.

Open farmland in Ontario

Raw and vacant land

For vacant land, lenders look closely at what the land has and what you plan to do with it. Year-round road access, hydro at the lot line, and whether a well and septic system are possible all matter, as do zoning and how soon you intend to build. Expect to put more down than you would on a house, and shorter terms are common. Sometimes the better route is to use equity in a home you already own, and I will compare both with you.

Hobby farms

A hobby farm is a home with acreage and outbuildings where farming is not your main source of income. Some lenders treat these as residential mortgages but limit how much of the land and how many outbuildings they will count toward the value. Others are comfortable with larger acreage. Matching the property to the right lender makes a real difference to how much you can borrow.

Agricultural and working farms

When the farm itself produces income, it is usually financed as a farm loan. Lenders look at the operation as a business: financial statements, production history, equipment and, where it applies, quota. A smaller group of agricultural lenders and credit unions specialize in this, and they each have their own appetite for different types of farms.

How I can help

I look at the property and your plans first, then take the file to lenders that actually do this kind of financing. Rates, terms and approval depend on the property, the borrower and the lender, and every application is subject to lender approval.

Buying land or a hobby farm? Start with the residential enquiry form. For a working farm or development land, use the commercial enquiry form, or call me at 416-721-3080.

Faisal Malik | Mortgage Agent Level 2
Dominion Lending Centres Edge Financial | Brokerage Licence #10710
Mortgage Agent Licence #M11000317
Independently Owned & Operated
Website: https://faisalmalik.ca/