Rural Loans in Australia

Rural loans in Australia apply to people who intend to:

  • invest into a home in a rural Australia
  • invest into a business in a rural Australia
  • invest into a home and business in a rural Australia (e.g.. farms)

A lot of pensioners try to leave the city congestion and move into countryside. This is often motivated with clean environment, peaceful surrounding, cheaper properties or simply returning to the family roots.

With the incredible progress in communication technology, a lot of young people choose to leave cities. Often they can run their businesses or work using internet. Whatever the reason is to invest into a rural lifestyle, the state governments strongly encourage people to populate countryside.

However, the definition of the rural area or countryside is not often clear. The rule of thumb states that a property is considered rural if either:

  • It is situated further than 50km from a provincial city or
  • It is situated further than 20km from a regional town

Rural Loans in Australia for Businesses

Lenders provide rural loans in Australia for business to upgrade farming equipment, stock animal resources, setup a retail. It is always easier for the borrower to obtain the rural loan if there is a stable income.

If you are a farmer then you are self employed. Although this often brings complexity to the loan application, the security for the loan (the farm) is an attractive financial incentive for banks.

This is the reason why farmers (contrary to other businesses) often get a more preferential treatment from lenders in rural areas. However, natural disasters, climatic changes and fluctuation of prices for primary goods also force government to financially assist the farming industry.

Federal and State Governments in Australia have programs to assist farmers with rural loans. QRAA in Queensland is an example of a very successful lending program. Currently, QRAA has a lending capacity of 15 billion dollars. The rural loans for farmers are on low interest rates ( 5 year fixed - %6.43).

QRAA also assists with flood assistance, drought assistance and other programs to sustain rural businesses. Private financial institution also have dedicated departments to provide rural loans for farmers.

Major banks like NAB, Westpac, ANZ all have the interest to finance agribusinesses. The amount to be borrowed will vary from one lender to the other. Most loans will be capped at 2.5 million. There will be also a requirement for the minimum amount to borrow (generally, not less than 10K).

Rural Loans in Australia for Home Owners

Number of people prefer a rural lifestyle. They have either resources, employment in the countryside or simply a work-from-home business. It is obvious that a small house in Melbourne CBD can finance a large property in the countryside.

However, a lot of people will still need some funding to reach the tranquility of the rural Australia. Generally, financial institutions do not discriminate against rural homes. They will provide funding based on your income, assets and the security for the loan.

If the purchased property serves as the asset then it will be evaluated by the bank. Some states even offer incentives for city dwellers to go to countryside.

The Victorian State Government provides a bonus (for first home buyers) of 6.5K in regional Victoria for the purchase or construction of a new home. There are also tax incentives to leave urban areas. A lot of lenders specialise in rural loans in Australia. However, for rural home loans in Australia you can approach almost any financial company.