Home Loans for Doctors in Australia

After years of schooling and moving across the country for residencies and fellowships, many doctors are excited to start putting down roots. But a home purchase early in one’s career can be challenging or even seem inaccessible. Fortunately, in Australia, medical professionals qualify for special home loans that are specifically catered to this group. Getting the facts on home loans for doctors can save you thousands of dollars and help you get home financing much faster.

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    Why do medical professionals qualify for special home loans?

    Lenders tend to favor highly-educated professionals because of their earning potential and job stability. Therefore, doctors make for especially low-risk borrowers, and enjoy a whole host of special offers. Home financing for doctors may include waivers or discounts on costs such as deposits, LMI, and home loan fees. There are also often interest rate discounts and additional features like offset accounts and redraw facilities.

    Which medical professionals can qualify for these benefits?

    Most lenders will use the word doctor in their advertising, but these loans can apply to many kinds of medical professionals. These include specialists, surgeons, psychologists, and other types of physicians. Dentists are also included in this list, as are many others in the medical field. Even those at an intern or resident level may be eligible, so it’s worth asking the lender or mortgage broker directly.

    How to find the best home loans for doctors

    Medical professionals interested in a home purchase will need to conduct some careful research before committing to a lender. When trying to identify the best mortgages for doctors, it’s important to pay attention to interest rates, loan fees, and whether it is a fixed rate, a variable rate, or a split. You should also think deeply about your prospective loan to value ratio and investigate any associated LMI requirements.

    The important thing is to move deliberately and not get pressured into a large purchase because you didn’t look past the sticker price. As a medical professional, your career trajectory makes you a particularly desirable loan customer. This gives you extra negotiating power and opens up additional doors.

    Benefits of special mortgages for doctors

    Many doctors are strapped for time and inadvertently rush into a home purchase without taking full advantage of the opportunities available. You should be aware of some of the main strengths of home loans for doctors, which include:

    • Lenders Mortgage Insurance (LMI)

      Low-deposit loans will typically mean that you have to take out an expensive Lenders Mortgage Insurance policy to help reduce risk for the lender. However, those employed in the medical field can get this requirement removed.

    • Higher Loan to Value Ratio permitted

      Your LVR is the percent of the home value that you took out a loan for. For example, a 10% deposit means you loaned 90% of the home’s value. Doctors are sometimes allowed to loan a larger percentage than ordinary borrowers.

    • Lower deposit needed

      For low-risk customers like doctors, lenders are comfortable with smaller deposits. This makes it easier to buy a house without needing to save up for a long time.

    • Lower interest rates

      Medical professionals with steady incomes are some of the best customers in the lending industry, so lenders will entice these prospective customers with discounted rates.

    • Additional discounts

      Doctor loans can be eligible for getting some common fees waived, including loan establishment fees, early exit fees, package fees, etc. Be sure to ask about any ongoing promotions.

    Drawbacks of special mortgages for doctors

    Just like any medical procedure carries some degree of risk, any loan bears potential disadvantages that you should become familiar with. Here are some to keep in mind:

    • Temptation to spend beyond your means. Extra-high loan limits and minimal down payment requirements make it easy to get carried away. Some lenders will play into the lifestyle creep that doctors experience, and pressure you into making purchases that aren’t financially sustainable.
    • Misleading advertisements. Some lenders may promote their loans as being ideal for medical professionals, when in reality some quick research reveals these loans to be the same as any other. It’s important to dig beneath the surface and see whether a “doctor-friendly” loan actually has anything unique about it.
    • Repeated real estate transaction costs. There are many auxiliary costs to the home loan process, like legal expenses and loan fees. If you foresee a transfer to a new city during the next step of your medical career, you may not want to sink costs into a home purchase if you’ll end up moving again in the near future.

    Requirements when seeking home financing for doctors

    While home loans for doctors are very streamlined, there is still some documentation you will need to prepare for the financing process. These include government identification documents, recent payslips, and proof of registration with the Medical Board of Australia or a comparable professional body for your field.

    What if my income is structured in an unusual way?

    Many doctors are self-employed with their own practices, work as contractors, or get Medicare income guarantees. These individuals may not be able to present a conventional payslip. To prove income and employment status, you may need your BAS and ABN paperwork, recent bank statements, or past & future contracts if you work on a medical contractor basis.

    Home loans for doctors FAQ

    Will I qualify for a doctor home loan if my partner is a medical professional?
    Yes, if you are borrowing jointly with your partner, you can qualify for doctor-targeted promotions together.
    Do nurses qualify for doctor home loans?
    Usually not, because they are not considered to have the same high-level earning potential that doctors have. However, nurses and other base-level medical professionals may still qualify for an LMI waiver if they can demonstrate stable employment and income. They could also receive discounted interest rates if borrowing more than $250,000.
    Which types of doctors are ineligible for these home loans?
    Medical research scientists and naturopaths are two groups that are usually not included in the premium low-risk group of loan customers. However, they can still receive reduced interest rates if they have a strong employment history and can pay a substantial deposit.
    Should I use a mortgage broker to apply for a doctor’s home loan?
    Yes, this is absolutely worth looking into. Mortgage brokers can help navigate complex home purchases. They also take away a lot of the stress and time required to buy a home, which is extremely beneficial for money-rich but time-poor professionals.
    Can I get a car loan if I’m working as a doctor?
    Yes, although car finance providers usually don’t offer as many doctor-oriented deals as compared to home finance providers. However, you will still benefit from having a sizable and dependable income, which can lead to lower rates.

    Home loans for doctors conclusion

    Doctors and other medical professionals often find themselves needing housing in a new city on short notice, often multiple times in their lives. Fortunately, many lenders offer very competitive deals on home loans for doctors, thanks to their usually reliable career trajectories and accompanying income. Doing your research on home mortgages for doctors can save you a large amount of time, money, and stress.