Home Loans for Doctors
There are many benefits to being a medical professional when it comes to applying for a home loan. At OzBrokers, we’re here to help you find the best possible deals and discounts.
To kick things off, we’ve put together this straightforward guide to the kind of options available - and the opportunities to save potentially thousands in repayments across the life of your loan.
As always, if you have any further questions, please don’t hesitate to contact one of our expert consultants - we’re here to remove any stress and confusion from the situation.
Why do doctors get special deals on home loans?
Put simply, the banks are delighted to do business with you - and are happy to sweeten the deal! They have confidence in your high earning capacity and low risk of defaulting on repayments.
At OzBrokers, we can cut through the chatter as various banks and other third parties compete for your custom, comparing various policies and loan requirements, then working out what’s best for your individual needs.
We can also help to streamline the process of getting approval. This can be helpful especially if you are self-employed or in a partnership-style business.
Now for the essential details:
What type of doctors are eligible for special “deals”:
Registered medical health professionals with eligibility include the below. Please note, in Australia, you must be a member of a medical association:
- Surgeons (including Heart, Cardiothoracic,Paediatric, Neurosurgeons, Maxillofacial surgeons etc)
- GO Registrars
- Heart Doctors
- Interns (Hospital employees)
- Medical Administrators
- Medical Registrars
- Clinical Pharmacologists
- Dental Specialists
- Gastro Intestinal Experts
- Radiation Oncologists
- Reconstructive Surgeons
- Specialist physicians
- Surgical Registrars
We can also work to deliver special offers to allied health professionals including:
- Dental Tech
Are some medical professionals excluded from eligibility?
Yes, unfortunately. Discounts won’t be available to some people working as medical professionals: including naturopaths and psychologists but please check with us as lenders are now changing their mind day by day. Medical researcher was not eligible until a major lender added it into its eligible list recently.
Do Nurses qualify for the same discounts as doctors?
Nurses qualify for a different type of home loan deal - due to their lower income earnings. We’ve put together a blog that explains their special home loan discounts here.
My partner is a medical professional, but I’m not - will we still qualify for benefits?
Yes, if you’re applying for a home loan together - as long as one of you meets the requirements for employment as a medical professional - you’ll be eligible for benefits.
How much can a doctor borrow?
Obviously, banks see you as a much lower risk, so as a rule you’ll be able to borrow significantly more than the rest of the population.
Here are some hypothetical criterias and scenarios to consider:
- You could borrow up to 90% of the property’s value and pay no LMI (which applies to the largest range of lenders)
- You could even borrow up to 100% of the property’s value and pay no LMI (although a stricter lending criteria applies).
- You can borrow up to $5 million to purchase a home to live in, or investment property
So no deposit would be required - you’d only have to cover stamp duty costs.
However, note, if a property is valued over $5m - banks and lenders would look at these on a case-by-case basis.
Why do the banks waive LMI for medical professionals?
Lenders mortgage insurance (LMI) is a one-off fee that insures banks against a loss they might incur if you can’t make mortgage repayments. For the general public, it applies if they borrow more than 80% of the value of the property.
However, since medical professionals are seen as “low-risk”, this is generally waived for them. That’s potentially a massive saving - often to the tune of multiple-thousands of dollars.
As a general rule, 100% no-LMI home loans for doctors are structured a couple of ways:
- 10% of the purchase price – on a 6-8 year loan term (ideally to be repaid faster, or consolidated in the short term)
- 90% of the purchase price – on a regular 30 year home loan
And there are other perks you might encounter - for example:
- You can find interest rates that are significantly lower than advertised.
- You can employ strategies that lead to faster repayments of your mortgage.
- Increased asset protection by letting you borrow in a trust.
- The ability to borrow up to 105% of the value of your property if your parents act as guarantors.
We’re in the business of helping you maximise these opportunities - looking to the best interest rates/deals available for doctors, and for your needs.
Just remember, each lenders’ policy is different (and they’re often changing), with their suitability for you depending on factors such as the terms of their mortgages, whether they’ve got fixed or variable rates, the type of properties they specialise in and how they will verify your income.
We’ll also be on the lookout for things like hidden service fees - and, of course, how to negotiate on your behalf.
Typical features of Mortgages For Doctors
They work in a similar way to regular mortgages with features such as:
- Loan terms up to 30 years for residential properties, or up to 25 years for commercial properties.
- Individuals, trusts or companies as the owner.
- Interest Only Periods (up to 10 years)
- Extra repayments: Available on variable facilities
- Offset accounts (with some lenders allowing multiple offset accounts)
- 100% LVR (with some lenders on single properties)
- Redraw (lender depending)
- Cash Out (purpose depending)
- Capitalised Interest: depending on the purpose
Can you get an Interest-only no-LMI home loan?
It’s possible, and it’s potentially a great way to save money that you can invest in other areas. And if you get a discounted interest rate, those savings will only improve.
If you're going to use an interest-only doctor home loan, you should be able to get an LMI waiver.
However, if you are buying a property to live in (also known as an owner occupied home) the banks do not like giving Interest Only Doctor Home Loans unless there is a reason, like if you are planning on turning the property into an investment within a few months of moving in.
Making extra repayments
One of the distinct advantages of being a doctor is that your regular overtime presents the opportunity (depending on structuring your home loan correctly) to make small extra repayments.
Another option is to increase the frequency of your repayments - say, from monthly to bimonthly. The quicker you can pay off your home loan, the more you’ll cut your interest bill and shorten the life of your loan.
Starting a Medical Practice
If you’re looking to start your own medical practice, banks will consider some of the following factors when looking to approve a loan.
- The requisite medical qualification and experience.
- As many assets behind you as possible!
- A Medicare provider number.
- If you’re a dentist, proof of registration to the Australian Dental Association - or if you’re a vet, the Veterinary Surgeons Board.
A “Medical Practice Business” loan will allow you to borrow up to 100% of your businesses’ value (in leased premises), including the equipment and fit out costs, for 10 years.
Meanwhile, a “Medical Practice Property Loan” can let you borrow up to 100% of the property value - with a maximum term of 25 years.
We’re here to help
Of course, there are many potential complexities when it comes to securing a doctors’ home loan - that’s where OzBroker can help you through the process to achieve the best outcomes. Feel free to contact us for a discussion!