Did you know that lenders offer special home loans for doctors and medical professionals? As a doctor or medical professional, you are considered a low-risk borrower and therefore eligible for special concessions that are not available to the general public.
Medical professionals are considered to earn higher than average salaries, with a more stable and reliable job compared to other professions. Some of the key benefits of home loans for medical professionals include:
As a doctor or medical professional, you are potentially eligible to have your lender’s mortgage insurance waived. Lender’s Mortgage Insurance (LMI) is a one off payment that is added to your loan to protect the bank against any loss if you default on your loan repayments. LMI is based on the amount of money you borrow and how much deposit you can pay.
In most cases LMI can be avoided when a borrower has a 20% deposit which means borrowing 80% of the value. As a doctor or medical professional lenders can waive Lender’s Mortgage Insurance even if you don’t have the required 20% deposit. Lenders have different criteria depending on your medical profession, loan amount or property you are purchasing however in some cases you can borrow up to 95% of your property value without paying lender’s mortgage insurance.
Another benefit of home loans for medical professionals is lower interest rates. Depending on the individual lender and the home loan, many lenders offer discounted rates to medical professionals. It is worth asking your chosen lender, or your mortgage broker who will operate on your behalf if they are willing to negotiate on interest rates or waive certain fees.
Due to the low-risk nature of medical professions in the eyes of lenders often less paperwork and proof of income is required as part of the application process. This also extends to medical professionals and doctors who work in salaried positions, or are self-employed, work on a contractual basis or as a locum, or have a combination of these income types.
The loan assessment requirements will vary from lender to lender, but some lenders will assess income without seeing tax returns, whilst others will only require 2 years’ worth of income assessment notices, and others will just consider your current year’s income in their assessment. Later in the article we also discuss paperwork that may be relevant if you have what might be considered a non-traditional income.
To be considered for a home loan as a medical professional you need to be working within one of the following professions.
Anaesthetist, Cardiothoracic Surgeon, Chiropractor, Clinical Pharmacologist, Cosmetic Surgeon, Dentist, Dermatologist, Ear and Throat Surgeon, Emergency Surgeon,Endocrinologist, Gastrointestinal Surgeon,Gastroenterologist,General Practitioner (also known as a Medical Practitioner)
Gynaecologist, Haematologist, Hepatologist, Immunologist, Nephrologist, Neurosurgeon, Neurologist, Obstetrician, Oncologist, Ophthalmologist, Optometrist, Oral and Maxillofacial Surgeon, Orthopaedic Consultant, Orthodontist, Otolaryngologist, Paediatrician, Paediatric Surgeon (Neonatal and Perinatal)
Pathologist, Plastic Surgeon, Pharmacist, Physician, Physiotherapist, Podiatrist, Psychiatrist, Radiologist (Note: This doesn’t include Radiographers), Reconstructive Surgeon, Respiratory or Thoracic Surgeon, Surgeon, Urologist, Vascular Surgeon, Veterinarian
Medical research scientists, naturopaths, dental hygienists, podiatrists, medical radiation practitioners and other wholistic practitioners are not eligible for home loans for doctors or medical professionals. This is because lenders, rightly or wrongly, have set statistical requirements and these professions are considered lower earners and therefore higher risk borrowers.
In these cases, you may still be eligible for a lower interest rate if you have a substantial deposit and a strong employment history. Bear in mind this varies from lender to lender, so it is best to always consult with your mortgage broker or property finance expert.
Aside from the listed professions you also need to be a member of a registered medical association. Some of the associations that are recognised include:
Not all medical professionals work the typical 9-5 hours, and many are self-employed. In most cases, payslips are required as proof of income, but sometimes this isn’t possible or is not reflective of your overall income. Other things that can be used to provide evidence of income include BAS statements, tax returns, six months’ work of bank statements as well as present, past and future contracts if you operate on a contractual basis.
Aside from saving on the Lender’s Mortgage Insurance, interest rate discounts available for doctors and medical professionals could lead to large savings over the life of the loan. Even a 0.25% could lead to thousands saved.
In the below example, we’ve compared the differences between a regular home loan with LMI and a home loan for doctors with LMI waived and an interest rate that is 0.25% lower. Both instances apply to a property worth $2,000,000 purchased with an LVR (loan to value ratio) of 95% over a 30 year period.
Note: the LMI used is relevant to CBA. Different banks do have different LMI rates and the above should be used as an example only.
Applying for a home loan for doctors isn’t as simple as a general home loan which is why it is best to work with an experienced and reputable mortgage broker.
Mortgage brokers have direct lender relationships allowing them to access a wide variety of loan products to ensure you get the best deal. They are also often able to access discounts not available to the general public. At Townsend Wealth we have access to over 35 specialist lenders, including the Big 4.
It is not uncommon for doctors or other medical professionals to have a more complex income structure. For example, some doctors work on a contract basis, whilst others are self-employed which can make it harder to show consistency of income. A mortgage broker will be able to take all the moving parts of your income and potential borrowing capacity, putting it together in the correct structure to meet various lender requirements.
When looking for a home loan as a doctor or medical professional there is more research required as not all lenders offer specific medical professional home loans. Working with a property finance expert will save you time and stress as they will do the research for you to find the right solution for your situation.
No, not all lenders will offer home loans for medical professionals. This is why working with a mortgage broker can be extremely helpful as they will have access to many lenders including those who offer waived LMI and interest rate discounts for medical professionals.
Yes, the Big 4 banks do offer loans for doctors. However, they do not all offer the policy to the same range of doctors and medical professionals. It is important to look at all lenders including smaller independent lenders as you may find better deals.
Unfortunately, nurses are not able to access a medical professional home loan. As a nurse, you will need to apply for a regular home loan. Depending on your situation you might be able to access some discounts, but these won’t be to the same level.
If you are taking out a home loan together with your partner then you can qualify for a home loan for medical professionals as long as your partner’s profession is an eligible medical profession.
As a medical professional, you are looked upon favourably by lenders and considered a low risk borrower due to your income level and job security. For these reasons, lenders are willing to waive Lender’s Mortgage Insurance for eligible medical professionals.
Yes, both investment and commercial properties can be considered with medical professional and doctor specific home loans.
Absolutely. Home loans for doctors and medical professionals cover refinancing.
If you are a medical professional looking for a home loan, contact the team at Townsend Wealth today on 02 9954 6104. Our team of property finance team are specialists when it comes to home loans for medical professionals. We work with our clients to find the right home loan with the correct structure that considers long-term career and practice growth.
