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Straight Answers · First home
Can I buy a block of land now and worry about the build later?
Bayley Clarke · Mortgage broker on the road · Last checked 3 September 2026 · 3 min read
The short answer
Yes. A lot of banks will lend for vacant land, and you don't need to build right away.
The catch is the government help. If there isn't immediate construction on the block, you're not eligible for the 5% guarantee scheme. So typically you'll need the full 20% deposit, or less if the bank supports it, and you'll pay lenders mortgage insurance for the gap.
The one minute version. The rest of this page is the detail underneath it.
Banks lend on land, with a bigger deposit
A lot of banks will lend for vacant land. Land can't generate an income and you can't live on it, so the banks add a bit of risk into the equation compared with a house, and that shows up as a lower maximum loan-to-value ratio at most lenders. If you're buying a block and you have no idea when you'll build, but you know you want to build on it in the future, typically you'll need to come up with the full 20% deposit, or if the bank supports it, less.
Where the block is matters too. A serviced block in a town gets the friendliest treatment. Large acreage, no services, or a long way from a town centre, and the list of lenders gets shorter and the deposit bigger. The vacant land with no intent to build page has the deposit detail.
The scheme is the thing you lose
You will not be eligible for certain government schemes if there is not immediate construction on that vacant block. The 5% deposit guarantee is built around a home you're going to live in, so a bare block on its own doesn't qualify. A land-and-build package with a construction contract attached can.
So the real decision isn't whether you can buy the land. It's whether buying it now, without the scheme and probably with LMI, beats waiting until you're ready to build and using the scheme on the whole package. For some people the block they want is the block they want and the maths is worth it. For others, waiting a year saves a lot of deposit.
When you do build
When the build happens, the land loan becomes part of a construction loan. The bank values the finished house off the plans and the contract, lends against that, and pays the builder in stages as the work is done. If the land has gone up in value since you bought it, that growth counts as your equity in the build, which is the quiet upside of buying early.
The honest bit: land doesn't pay you anything while you wait
A block of land is a loan repayment with no rent and no roof. If the plan is to hold it for three years before building, that's three years of interest on something that isn't housing you. Sometimes the growth covers it. Sometimes it doesn't.
Run it as a number, not a feeling. If the holding cost is clear and you're fine with it, buy the block.
Found a block and want to know what it takes?
A 30 minute call. Deposit needed for that block with the lenders I work with, what LMI would look like, and what changes if you attach a build to it now instead of later.
No cost to you. The bank pays me when a loan settles. ยท How I get paid
Next question
Do I need to save a full 20% deposit again for my next home?If you already own, equity can be the land deposit.
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Rentvesting: buy the investment first and keep renting. Does it work? Do I need to save a full 20% deposit again for my next home? Can I buy vacant land with no intent to build?Not your question? Book a call and ask it, or call 0437 189 939.