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Home Loans for Doctors

Name: Home Loans for Doctors
Creator: Savvy
Published: 2021-03-22T15:12:18+10:30

Are you a doctor looking for a home loan? Find out more about what possible options are waiting for you.

No obligation. It wont affect your credit score.

Written by , updated on August 7th, 2023

You may not have heard about a special category of home loans specifically for doctors. This allows medical professionals to purchase a home at lower immediate costs and with more ease than a regular borrower.

These special offers extend to doctors and some other medical professionals because of their high levels of income and job security.

How do home loans for doctor’s work? What are you eligible for?

These loans offer medical professionals a range of discounts and special rates. These include:

The ability to borrow up to 100% of your chosen property’s value.
In many cases, doctors will not need to pay LMI when applying for a 100% home loan.
Lower interest rates.
Fee discounts.
100% offset accounts.
Free redraw facility.

What can I save with no LMI when applying for a doctor’s home loan?

Not needing to pay LMI could save you a lot. On a regular home loan, LMI could add a significant amount of money on top of the deposit that is being paid. Take for example these LMI payments required for different levels of borrowing on a property worth $750,000:

Borrowing level (LVR)	LMI %	LMI payment required
85%	1.333	$9,997.50
90%	2.367	$17,752.50
95%	4.613	$34,597.50

*Different house prices will incur different LMI percentages

What will a doctor’s home loan save me overall?

Further discounts on interest rates and fees can save doctors large amounts of money over the long run.

Doctors could see a discount of as much as 0.25% on their home loan’s interest rate and even see their annual fees waived. This can lead to considerable savings as can be seen with this example for a property worth $750,000 at 95% LVR over a 30-year loan term:

Type of Home Loan	Deposit	LMI	Fees	Interest rate	Monthly repayments	Total repayments
Regular Home Loan	$37,500	$17,752.50	$400	2.5%	$3,034	$1,092,078
Home Loan for Doctors	$37,500			2.25%	$2,867	$1,032,065

Based on the above, a doctor’s home loan could save you $60,013 over a 30-year loan term.

Do I qualify for a doctor’s home loan?

To qualify with most lenders, you need to be working as one of these professions:

Anaesthesiologist/Anaesthetist
Cardiologist
Cardiothoracic Surgeon
Chiropractor
Cosmetic Surgeon
Dentist
Dermatologist
Doctor
Intern Doctor
General Practitioner
Epidemiologist
Endocrinologist
Gastroenterologist
Gynaecologist
Immunologist
Neurologist
Obstetrician

Oncologist
Ophthalmologist
Optometrist
Orthodontist
Paediatrician
Pathologist
Pharmacist
Plastic Surgeon
Psychiatrist
Psychologist
Radiologist
Rheumatologist
Surgeon
Urologist
Veterinarian

All of these professions come with different levels of income. This means that the type of discounts and products they can access may differ slightly.

What if I have an unusual income?

Many doctors are not typical 9-5 full time workers and sometimes are self employed, partners in businesses, contractors and some even receive Medicare income guarantees. So, applying for a home loan using recent payslips is either not doable, or not an accurate reflection of your income.

In order to prove your income and employment status, you may produce the following:

BAS statements
Tax returns
Past, present and future contracts (if you are a contractor)
6 months of bank statements (trading or personal)

Any other documents proving their income and employment status

Your home loan options

First home loans

Making your first big step towards buying a home? It's crucial to be across your mortgage options as a first homebuyer.

Variable rate loans

Opting for a variable interest rate on your home loan means it'll fluctuate as the market moves throughout your repayment term.

Fixed rate loans

On the other hand, fixing your rate locks it in for a pre-defined period. This can bring with it greater certainty around your budget.

Home loan refinance

It's important not to set and forget when it comes to your home loan. If you find a more competitive offer, it may be worth refinancing.

Construction loans

If you're looking to build a new house, construction loans are specifically designed to cater to the different needs associated with doing so.

Guarantor loans

A guarantor essentially acts as a safety net for your lender, as they sign onto your loan to agree to pay it off should you become unable to do so.

Investment loans

Purchasing a property as an investment brings with it different specifications from a lender. It's crucial to know what your options are.

Commercial property loans

Businesses big or small may wish to purchase a property for commercial purposes, which are also different from a standard loan.

Interest-only loans

Your home loan may give you an interest-only option, which allows you to exclusively pay interest on your loan for a set period.

Self-employed loans

Just because your finances may be slightly more complicated as a self-employed individual doesn't mean you can't take out a home loan.

Low doc loans

Some lenders may allow you to apply for a home loan with alternative documents, such as tax returns, BAS and ABN registration.

No deposit loans

There are several options for purchasing a property without a cash deposit, such as equity in another property if you or your guarantor own one.

Why compare home loans with Savvy?

100% free

You don't have to pay a cent to compare home loans with us, enabling you to do so at any time.

Paperless quote process

You can fill out a simple online quote via our form without having to worry about sorting through heaps of paperwork.

Trusted lenders

With a panel of reputable mortgage lenders behind us, you can rest assured you'll be comparing high-quality options.

How to apply for home loan as a doctor

Finding the right home loan product for your situation

Finding a doctor’s home loan is not as simple as your standard home loan, there is a lot more research required and not all banks and lenders offer a solution.

Exploring where you can find the best possible deal could save you large amounts of money in the future. This could come through the waiving of LMI and annual fees, discounts on interest rates, offset accounts, redraw facilities, or all of these together.

Speak to as many banks and lenders as possible and consult our comparison table to find the right home loan product for you.

Pre-approval

Pre-approval or conditional approval is where a bank or lender assesses you on your ability to borrow and repay on a home loan.

To apply for pre-approval, you will need to gather your personal documents to apply for the loan. There are some similarities in the documents needed for a home loan application between regular borrowers and doctors, including:

Driver’s license
Passport
Proof of Australian citizenship or permanent residency
Recent payslips
Employment contract
Or other documentation proving your employment status as mentioned previously if you do not have access to these documents

The only difference between applying for pre-approval with a regular home loan and a home loan for doctors, is the need to provide proof of your registration to the Medical Board of Australia.

Look for further discounts

Although most lenders by default offer certain discounts to doctors, the amounts on offer vary greatly from lender to lender. Therefore, comparing your options just like you would with a standard home loan is essential.

Often banks and lenders will not advertise the extent of discounts available for a doctor’s home loan, so to have the best possible understanding of their product, ask them if there is anything else available.

Find your new home and settle

The most important step in the home loan process regardless of whether it is a regular or doctor’s home loan is finding the right home. It doesn’t matter whether this is your first home, your next home or even an investment property. It is still important to find the best home for your situation.

Once a house has been procured your application will then proceed to formal approval and settlement.

Common questions on home loans for medical professionals

What is Lender’s Mortgage Insurance (LMI)?

LMI is insurance for lenders that is paid upfront by borrowers to protect them if borrowers are not able to make their repayments. It usually applies when a home buyer borrows over 20% of the property’s value.

Why don’t I need to pay LMI when applying for a doctor’s home loan?

Medical professionals usually don’t need to pay LMI because they are considered low risk borrowers to lenders. This is because of their high income levels and job security.

What is an offset account?

An offset account is a bank account that offsets the amount in the account against your home loan. For example, if you have a home loan for $750,000 with $100,000 in your offset account. Your monthly upcoming home loan repayment will calculate interest based on a home loan amount of $650,0000. Having an offset account allows you to pay off your home sooner and save on interest as monthly you will be paying off more principle and less interest.

You can use this account like any other standard bank account, withdraw, deposit and have debit cards attached to it.

What is a redraw facility?

A redraw facility offers borrowers the ability to take cash off their total home loan repayments as they please.

Do the Big Four banks offer these loans?

The big four banks (namely NAB, ANZ, Westpac and Commonwealth Bank) do offer doctor’s home loans. Some understandably rather borrowing from one of the big four banks, but it is important to look at the entire lender market as there may be better deals available with smaller lenders.

Should I use a mortgage broker to apply for a doctor’s home loan?

A mortgage broker could be highly beneficial in helping you secure this type of loan. This is because they are usually of great assistance in more complicated situations such as this one. A mortgage broker would also help someone who is time poor as many doctors are.

If I want to enter this type of loan with my spouse, do we both need to be doctors?

No. Only one person entering the loan needs to be a doctor. However, if a couple were both doctors, it would certainly be favourable to them and increase the borrowing power much further.

Do nurses qualify?

Unfortunately, nurses cannot receive a doctor’s home loan and will need to apply for a regular home loan. Discounts can still be received on regular home loans, but likely not to the extent of a doctor’s home loan.

If I’m not a doctor can I still access this type of loan?

If you aren’t a doctor you won’t be eligible for this specific category of home loan. But there are home loans out there that apply for those in other professions with similar low risk borrowing levels. These are known as professional package loans and depend on your income levels and job security.