So you’re ready for a tree change? Here’s what you need to know about lifestyle loans for rural property.

You're dreaming of moving to the countryside, where you can have a few acres to yourself, maybe keep some animals, have a big vegetable garden, or just enjoy the open space and fresh air with the family. A lifestyle loan is a type of financing designed to help make that dream a reality.

It's a loan that helps you purchase a property that's more about enjoying a particular way of life than running a big commercial farming operation. So, if you're not planning to make a living from the land but want to live on it and use it for personal enjoyment or small-scale hobby farming, this is where a lifestyle loan fits in.

So, what exactly is a lifestyle loan?

It's for buying or expanding a rural/residential property that you intend to use mainly for your enjoyment, not for large-scale farming. The loan might look a lot like a regular home loan, but it considers the unique aspects of buying rural property. You might have animals, grow your own food, or maintain the land for conservation purposes, but the scale is small and for personal use.

Is there a limit on the property size?

There's no strict rule about the size of the property. It could be a few acres or more, but generally, it's smaller than a commercial farm. Some lenders may have limits, for example, only for land up to 10ha whilst others may support 150 acres, but it usually depends on many factors, including your income, financial position as well as what you’re using the land for. Lenders who offer lifestyle loans understand that your income might not come from the land, so they'll look at your whole financial picture when considering your loan application.

In essence, a lifestyle loan is about funding your vision of a rural lifestyle, where the land's use is for personal satisfaction rather than commercial gain. If this sounds like what you're looking for, a lifestyle loan could be your first step toward that tranquil country life you've been imagining.

Is the process for applying for a lifestyle loan similar to that of a standard home loan?

→ Financial Assessment: You’ll need to provide proof of your income, expenses, assets and liabilities.

→ Property Valuation: This can be where lifestyle loans differ. The valuation of rural property can be more complex than standard residential property. The lender will assess the property's value, considering factors like its size, location, available resources (like water), and land use restrictions.

→ Deposit: You’ll still need a decent deposit size, depending on the lender’s policy and the property’s valuation. Sometimes, a larger deposit might be required compared to urban properties, especially if the property is larger or considered higher risk.

→ Loan Application:

You'll submit a loan application form, just like with a regular home loan. This will include your personal and financial details, as well as details about the property you wish to purchase.

→ Approval Process: The lender will review your application, conduct a credit check, and assess the property valuation.

→ Documentation and Closing: If approved, you'll receive a loan offer. You should review this with a financial advisor or solicitor. Once you accept the offer, legal and loan documents will be prepared for signing, and the closing process will begin.

→ Settlement: On the settlement date, the lender will provide the funds to purchase the property, and you'll start making loan repayments according to your loan agreement.

Considerations Unique to Lifestyle Loans

Rural Zoning and Land Use: Make sure to understand any zoning laws or restrictions on land use, as these can affect both the valuation and the loan approval.

Access to Services: Rural properties might have different considerations regarding access to utilities, roads, and services, which can be a factor in the lending decision.

Future Plans: Be prepared to discuss your plans for the property, as lenders might take this into account.

How can IDEAL Financial Group help?

The right professional mortgage broker can have a profound understanding of the unique challenges and opportunities presented by rural and lifestyle properties. IDEAL Financial has assisted many clients in securing the rural property of their dreams. Leveraging our extensive network of lenders, we are adept at finding and securing competitive loan options that align perfectly with your rural lifestyle aspirations.

Whether you're looking to purchase a small hobby farm or a tranquil countryside retreat, our experienced brokers are committed to making your journey to rural homeownership as smooth and straightforward as possible. If you’re interested in learning more, we’d love to hear from you.

Contact Us