Lenders view doctors and medical professionals as lower-risk borrowers. Doctors are highly trained, well-compensated relative to most jobs and in high demand. So when doctors apply for home loans, lenders consider them a safe bet. In practical terms, this means:
- Doctors may avoid lenders mortgage insurance (LMI) with low deposit home loans.
- Doctors could get discounted interest rates, depending on the lender.
- Doctors may have an easier time getting approved for a loan compared to most borrowers.
Chat to a broker about mortgage options for doctors
How doctors can get LMI waived
Normally, when a borrower approaches a lender with a 10% deposit, the lender charges them an LMI premium on top of everything else. This is because you have a low deposit (under 20%). LMI protects the lender if you can't repay the loan later.
But if you're a doctor, your lender may waive this cost. Medical professionals are highly paid and have secure work, so the risk to the lender is lower. This means doctors can get low deposit home loans cheaper than other borrowers.
Avoiding LMI could save you thousands, or even tens of thousands in premiums (we've crunched the numbers below). But doctors can save in other ways too.
How much could a doctor save on LMI premiums?
The amount of LMI you could save with one of these loans can differ depending on whether or not you're a first home buyer, where you're buying and more. Here are some indicative figures using Finder's LMI premium calculator.
All the results below are estimates for a first home buyer with a 30-year loan.
In these example scenarios, a doctor can save thousands in LMI premiums while still getting the loan they need.
How doctors get interest rate discounts
Lenders offer discounted rates for all sorts of reasons. Sometimes they advertise these rates for all borrowers. Often they don't. You probably won't find "discounted rates for doctors" listed on any lender's website.
But it's worth asking about any discounts when you apply. You may be able to negotiate a lower rate quite easily as a doctor.
And discounted rates can save you a lot of money. Let's say you wanted to borrow $600,000 over 30 years, and your lender's rate is 2.30%. But you negotiate a 0.05% rate discount.
- Monthly repayments at 2.30% = $2,308
- Monthly repayments at 2.25% = $2,293
That's a small difference of $15 a month. But that's $180 in a year. And your home loan could be with you for decades, so any discount on your rate will save you.
Lenders may also waive loan fees for doctors. This could include the application fee or ongoing service fees. Again, this really varies by lender and you probably have to ask up-front. But a fee waiver could save you a few hundred dollars, or more.
Example: Dr Dave’s home loan
Dave is a surgeon who earns $150,000 per year. He’d like to buy himself an inner-city apartment priced at $1 million, but he’s only got $100,000 saved for a deposit. When he approaches his bank for a loan, he’s dismayed to discover that it requires him to fork out several thousand dollars for lenders mortgage insurance before they will approve him for a loan.
Looking elsewhere, he discovers a lender that offers home loans for doctors. This lender is happy to waive his lenders mortgage insurance payment even though he needs to borrow 90% LVR, plus they also offer a lower interest rate than his bank. As a result, Dave is set to save approximately $20,000 in LMI costs.
* This is a fictional, but realistic, example.
How do I access these home loan discounts as a doctor?
As with many things in life, if you don't ask you don't get. Most lenders aren't public with their lending and eligibility criteria.
- Before you apply for a home loan, check with the lender. Ask them if they offer rate discounts or LMI waivers for doctors with low deposits. If they don't, look elsewhere.
- When you do apply for a home loan, tell the lender and ask for a discount or LMI waiver. Remind them what they told you before you applied, in case there's any confusion.
- If you're unable to find a lender that can help, consider talking to a mortgage broker. These professionals have a good sense of which lenders offer the best benefits to doctors.
Which medical professionals can qualify for these benefits?
Everything we've covered on this page ultimately depends on the specific lender you choose. But as a general rule, lenders may offer discounts and LMI waivers to doctors and other highly qualified medical professionals. This includes specialists, surgeons, dentists and anaesthesiologists.
You may be able to qualify for these benefits as an intern or resident. But lenders won't consider nurses or medical researchers.
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Frequently asked questions about home loans for doctors