Farm land Interest rates in Marshall Countu
I'm wanting to buy out my sisters share on an 80 acre farm in marshall county and I'm wondering what the appropriate interest rate is at this time on a contract for 10 years?
Marshall County Iowa
Thank you for your question on farmland interest rates. According to http://www.farmlandinvestorcenter.com/landowner-resources/farm-mortgage-rate-watch, which is an independent analysis of Federal Reserve Bank data for January 2015 to March 2015, the average fixed long-term loan rate on farmland in Iowa and surrounding areas was 4.57%; the average variable mortgage rate was 3.47%.
This data does give you a starting point for determining an appropriate interest rate for the purchase of your sister's land, but those are merely past averages. Many factors must be taken into consideration. An article that dicsusses some of these considerations can be found on the Iowa State University Ag Decision Maker website: http://www.extension.iastate.edu/agdm/wholefarm/html/c4-07.html.
You may wish to contact your local ag lender to discuss your plans (even if your plans do not involve a loan), or visit with the ISU Extension and Outreach farm management specialist in your area. Find your specialist here: http://www.extension.iastate.edu/ag/farm-management-0.
Thank you for contacting me at www.eXtension.org with your question. I hope this helps.
Best wishes for farming success.
Iowa State University Extension and Outreach
Women in Agriculture Program Manager