Calculate monthly repayments, total interest and see how extra payments can save you thousands on farm loans, machinery finance and land purchases.
A farmer borrows $500,000 at 7% over 25 years.
If they add $500 extra per month: Loan paid in 20 years. Total interest saved: $78,000.
As of 2026, typical agricultural loan rates range from 6-9% for secured farm loans. Machinery finance is often higher at 8-12%. Compare offers from Rural Bank, Rabobank, NAB Agribusiness and local credit unions.
Make extra repayments when seasonal income allows. Consider fortnightly instead of monthly payments — you make 26 half-payments = 13 full payments per year. Use seasonal bonuses or good harvest years to make lump sum payments.
Fixed rates give certainty for budgeting but lack flexibility for extra repayments. Variable rates offer flexibility and offset accounts but carry rate rise risk. Many farmers split the loan — fix 50-70%, keep remainder variable.
Principal & Interest (P&I) builds equity and pays off the loan. Interest-only (IO) has lower short-term payments but the loan balance doesn't reduce — best for land purchases before income starts, or during drought years.