Buying an Acreage? Here’s What You Need to Know About Financing

Acreage living is a dream for many: wide open spaces, privacy, and a slower pace of life. But before you jump into the process of looking at acreages online, there are key differences between buying an acreage and purchasing a home in town. Financing, zoning, and services all play a role in making acreage living a reality. Here’s what you need to know before making the move.

Financing an Acreage is Different

When buying a home in the city, getting a mortgage is fairly straightforward. However, financing an acreage can come with additional requirements, depending on the size of the land and its features.

Lender Policies: Most lenders have restrictions on the amount of land they will finance. Generally, a mortgage will cover the home and up to 5–10 acres, but beyond that, additional financing or a different loan structure may be required.
Unserviced vs. Serviced Land: If the acreage lacks essential services like water, electricity, or gas, it may be considered a higher risk by lenders. This could mean a higher down payment or additional conditions to secure financing.
Down Payment Requirements: A typical home purchase requires a minimum 5% down payment (for homes under $1M), but acreages often require 20% or more, depending on the land's value and usability.
Appraisal Considerations: Appraising an acreage is more complex than a city home, as factors like land use, outbuildings, and serviceability impact value. Be prepared for longer processing times.

Zoning and Land Use Restrictions

If you want to raise chickens, run a small business, or subdivide your property in the future, acreage zoning laws dictate what you can and cannot do with the land.

Agricultural vs. Residential Zoning: Some acreages are zoned as agricultural, which can affect property taxes, lending criteria, and land use restrictions.
Subdivision Rules: If you plan to sell part of your land, subdividing can be a lengthy and expensive process. Make sure to check local bylaws before committing to the property.
Livestock and Farming Restrictions: Not all rural properties allow livestock, and some have limits on the number and type of animals you can keep.

Utilities and Services: Not Always Standard

Unlike city living, acreages often lack municipal water, sewer, and garbage collection. Instead, you may need to manage:

Water Supply: Depending on the property, you may have a well, a cistern, or need to truck in water. Well testing and maintenance are essential for safe drinking water.
Septic Systems: Acreages typically use septic systems, which require regular maintenance and occasional pumping.
Garbage and Recycling: Rural properties may not have curbside collection, meaning you’ll need to transport waste to a local landfill or arrange private pickup.

Road Access and Maintenance

A long driveway in the middle of winter sounds amazing… until you have to clear it after a snowfall! Acreage owners are responsible for their own driveway and road access.

Snow Removal: If your driveway is long, a shovel won’t cut it. Many acreage owners invest in a snowblower, ATV with a plow, or hire a snow-clearing service.
Road Conditions: Some rural properties are accessed via gravel roads maintained by the district, but others may be private roads requiring upkeep by residents.

Internet and Cell Service: Do Your Research

If working from home is in your plans, check connectivity options before buying an acreage. Rural internet and cell service can be unreliable compared to the city.

Satellite and Rural Providers: High-speed internet may not be available, so you may need to rely on satellite or fixed wireless services.
Cell Reception: Some areas have spotty reception. Check coverage maps or talk to neighbours about their experience.

Is Acreage Life Right for You?

Acreage living offers incredible benefits, but it also comes with unique challenges. If you’re considering an acreage purchase, I can help you navigate the mortgage process and find the right financing solution for your dream property. Let’s chat!