The typical repayment terms can be flexible for farm mortgages. The loan term will vary depending upon the lender, but typically they can be anywhere from 5 years to 30 years.
Agricultural Land Purchases
Whether you're buying or transferring ownership of agricultural land, Rangewell provide the funding, flexibility and expertise you needSpeak to one of our experts020 4525 5312
- Commercial mortgages from 2% above base rate
- Agricultural mortgages
- Bridging loans
- Auction finance
Designed around your needs
- Can be part of 'jigsaw' funding designed around your needs
- Monthly, quarterly and annual repayments
- Tailored around your cashflow
- An adverse credit history need not be a problem
- Repayment and interest only available
- All types of land
- Buildings as well as land
- Refinance existing property assets
Finance for agricultural land purchases
Farm and agricultural mortgages for buying land
If you are ready to buy land, you may find that your options are limited. Your current banker may be a great source for funding for conventional business expenses. But to get the best deal on the funding you need, you must be able to call on a lender that understands rural property, cashflows within the industry, the cycles and current real estate values.
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Funding can also be arranged to consolidate an existing loan or mortgage, or buy out a relative or partner about to retire, in order to attain a more favourable financing structure.
Land Purchase Finance is the most common method to fund new land purchases, but because of the specialised nature of the farming business, many lenders will be unable to help. At Rangewell, we can help you find those that are.
Why is agriculture important?
The agricultural sector plays a key role in the UK economy. The potential of the sector may grow as Britain seeks to re-establish home food production outside the EU.
Because farming has come under intense financial pressure many farmers have looked at expansion to drive efficiency, and diversification as ways to maintain profitability.
Your funding options for agriculture mortgages
We can provide a number of solutions for the purchase of agricultural land. These include:
- Agricultural Mortgages
- Commercial Mortgages
- Commercial Remortgages
- Tenant Farmers Loans
What is an agricultural mortgage?
An agricultural mortgage is designed to help farmers buy farmland, farm buildings or improve their existing farm properties. They are a specialised loan product, with the loan secured by the land itself. They are used to finance the purchasing of a farm, a farm building or a farming enterprise of some kind.
A farm mortgage can also fund improvements or extensions to existing farm properties or associated land.
How do agricultural mortgages work?
You can usually borrow up to 80% of the value of farm buildings or land, Choose repayment terms between five and 30 years and interest rates that can be fixed or variable. Repayments can be arranged to fit your business cash flow, either monthly, quarterly or annually. If your business plans change, you can extend the term of your loan, subject to approval.
Loans can even pass from generation to generation – helping you build a farming business not just for yourself, but for your family in the years to come.
There will be valuation, arrangement and legal fees to consider. There can also be additional costs for the services of professional advisors – but you have a commercially sound proposition, we may be able to help you arrange the Agricultural Mortgage you need.
Contact us to find out more about Agricultural Mortgages.
How much can I borrow on an agricultural mortgage?
Agricultural mortgages can offer a vast range of flexibility with minimum lending amounts starting from as little as £25,000. In addition, most lenders can provide maximum loans that are uncapped should you need significant borrowing.
Due to the unique nature of agricultural history, each mortgage application will be addressed on its own merits.
The amount you'll be able to borrow will vary and usually depends on the following factors:
- The value of the land
- Your business plan and projected income
- Your experience in the industry
- Income and expenditure
- The size of the deposit
- Your credit history
For professional advice about how your circumstances can impact your mortgage application, speak with an experienced commercial mortgage expert today.
Raising funds with a Commercial Mortgage
If you already own your farm premises, a Commercial Mortgage might be a cost-effective way to raise funds to buy additional land. By taking out a loan on property and land you already own, you can raise considerable funds. A farm mortgage can also be arranged to consolidate an existing loan or mortgage, or buy out a relative or partner about to retire, in order to attain a more favourable financing structure.
Get our help in finding the most competitive lender.
Buying agricultural property with a Commercial Mortgage
A Commercial Mortgage is often used for buying business premises – but it is possible to set up a Commercial Mortgage for agricultural land with associated buildings. These operate much like a residential mortgage, with a large loan secured on the property itself.
Generally, Commercial Mortgages are for 15 years or more, and, as with a residential mortgage, the premises will be at risk if you are unable to keep up your repayments
Unlike a residential mortgage, the rates for a Commercial Mortgage are arranged on an individual basis. Lenders will look at your business, your accounts and projections to ensure that it has a future and set interest rates based on the level of risk they believe it presents.
Because of the legal and administrative costs, it is uneconomic to borrow less than £50,000 with a commercial mortgage, and some lenders have a minimum of £75,000 or more, but there is no set upper limit.
Find out more about Commercial Mortgages and agricultural finance today!
Alternative lending options
If you need more flexibility about how much you pay back and when, we can provide a wide range of running options, including loans from alternative lenders with a flexible approach to you your funding needs.
Speak to Rangewell today to see how we have helped other agricultural businesses grow.
Tenant Farmers Loans
Buying your farm tenancy can be a sound business idea and one that some landlords are increasingly becoming receptive to.
It can be easier than you think, thanks to a growing difference between the value of tenanted and freehold land – which can save you money when you come to buy out your tenancy.
You can borrow up to 60% of the full value of freehold land, which your tenanted farm will become on completion of the sale. By taking into account other assets such as your equipment and your house, you may well be eligible for a mortgage.
We can help you set up a mortgage with fixed or variable rates of interest, and interest only or repayment options repaid monthly, quarterly or half-yearly on dates which suit the cash flow of your business.
Loans can last for up to 30 years and can pass from generation to generation, so don’t need to be repaid if the borrower dies.
Contact us to find out more about lending to help tenant farmers buy their farms.
Agricultural lending with poor credit history
We work harder to find you the finance you need. So even if you have a poor credit history, no proof of income, or have defaults, CCJs or bankruptcy we can still help you find the answers you need to help you grow your farming business.
How can I get the best agricultural mortgage interest rates?
If you're looking for a mortgage for your farm, there will be plenty of mainstream lenders available to offer this type of borrowing.
Each mortgage will be reviewed on a case-by-case basis, so the interest rates on offer will be based on how the lender will perceive the strength of the application. For example, if your application has a high deposit, a strong credit record and a wealth of experience, the lender may be prepared to offer their most competitive rates.
How we help you capitalise your farming business
At Rangewell we work across the entire lending industry, and we have finance experts have personal experience in the needs of the agricultural sector.
That means we can provide a unique service. We will help you to find the most appropriate funding from lenders across the market – from established high street banks to alternative funding suppliers. Our specialist teams, experienced staff and land agents can give you all the help you need to develop a proposal and choose the right loan. We can even help with rural land purchase at short notice or even the finance to diversify your farming business.
Call us to arrange a confidential, no-obligation, a no-cost discussion that could set you on the path to owning your own farm.
REAL EXAMPLES OF WHAT WE CAN DO
Find the most competitive funding to let an established farming operation double the size of its operation
Help a young farmer acquire his first land holding
Find the most competitive finance to buy out a neglected tenant farm
Help an established dairy farm to acquire extra pasture
Help a syndicate acquire additional land to set up a major arable operation
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.
Helping you build your profits
Long-term fundingThe cost of your land purchase can be spread over years, or even over generations.
Raising fundsBuying land provides a valuable asset for the future, an asset that can help you raise further funding.
Low fixed monthly paymentsLending is secured on the land itself, so interest costs and your monthly repayments can be reduced.
Drive efficiencyIf you need additional land to farm efficiently, we can find ways to provide it.
Terms to suit your plansMortgage arrangements are flexible, and can be designed around your cashflow and other commitments.
Buying your tenancyIf you are a tenant farmer, we can provide solutions which could let you own your land.
Download Rangewell’s free and detailed guide to finance for the agricultural industry
What types of finance are available to the agriculture sector and which is right for your farming business?
How to find the right lender for your needs and why it's important
Do I have to choose a lender who is regulated by the Financial Conduct Authority?
Are there any downsides to applying for finance for my farm business?
How can I arrange Asset Finance for purchasing vehicles, machinery and equipment?
What paperwork do I need to submit with my application, or does it depend on the type of finance I'm applying for?
What key terms do I need to know about before applying for business finance for my farming business?
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Frequently asked questions
Have a question?
Firstly, you should ideally apply for a loan before you need it. It would help if you had an idea of the lender's requirements before committing to a loan. You'll need to have the following documents on hand.
- Credit score: The lower the credit score, the higher the risk, but this doesn't mean to say you won't qualify for a loan if you have an adverse credit score. Businesses can check their credit scores online but may have to pay a fee to access a full report.
- Annual revenue: Make sure you have accurate financial statements over the past two years. Many lenders will ask for copies of your bank account transactions so they can confirm cash flows that are reflected on your statements.
- Updated business plan: The lender will want to know how your loan will be used and how the company plans to grow, so ensure you have a ready-to-go business plan available. It should also include a plan on how to pay the money back.
- Additional collateral: You'll need to provide a personal guarantee to the loan, or you can pledge additional collateral such as personal real estate or other financial resources.
Most lenders will tell you that a reverse mortgage loan would not be the best lending option for purchasing a farm or associated land. This type of loan is typically used to release equity in your property when you're retired.
As with a residential mortgage, you'll need to pass strict criteria and will need to show that your business is profitable (or that you have a business plan), at least if you're new to the industry.
It's challenging to think about, but when someone dies, the debts they leave are paid out of their estate (the money and property they leave behind). By law, the family doesn't usually have to pay the deceased's debts from their own money.
An agricultural tie, also known as an agricultural occupancy condition, is a legal restriction limiting the occupancy of a property. They are legally enforceable conditions placed on a property by the local council on granting planning permission for such properties.