Doctors and other medical professionals may be entitled to special home loan package compared to others.
Several lenders are providing a wide range of products and rates to these groups of people. Doctors and select healthcare professionals may be able to avoid the cost of Lenders Mortgage Insurance (LMI) even when borrowing 100% of the property value from select lenders – a substantial saving.
What are the benefits of a doctor home loan?
Lenders offer a variety of house loan packages for professionals such as lawyers, engineers, accountants, and doctors. This is because they are known to be low-risk borrowers due to better job security compared to other professions.
Doctors, in fact, are preferred over all other professions due to their high earnings and have one of Australia’s lowest house loan default rates. They may be qualified for certain perks that are not available to other customers because they are valued clients.
Medical professionals may save a lot of time, stress and money by exploring these benefits and ensuring their financial and employment situations qualify them.
What are the advantages of getting a doctor mortgage? We have briefly explained the perks you can get in a home loan for doctors.
Lenders Mortgage Insurance Waiver
Usually, LMI is an insurance policy to protect the lenders in case of borrower default and is an additional cost for the borrowers. Banks levy LMI when you borrow more than 80% loan amount to valuation ratio. Lenders charge this fee to reduce the risk of default for them and could result in thousands of dollars adding up your loan amount.
Doctors can get a 100% waived LMI home loan, whether they are buying a home, refinancing or taking out an investment loan. Why? Lenders consider members of the medical profession as good lending candidates due to the following factors:
- They have a high income.
- They have a relatively stable income, with a strong chance of increasing over time.
- They are less likely to fail on their loan repayments.
- They may have high-net-worth client referrals.
- They are also likely to return with additional investments and loan product needs in the future.
In Australia, doctors are regarded as valuable borrowers. Banks and financial institutions will often make an extra effort to offer them exclusive benefits and discounts on their home loan.
Few lenders may either reduce or eliminate the cost of mortgage insurance for medical professionals, resulting in huge savings while getting a mortgage.
Discover if you qualify for waived LMI
The eligibility requirements for a LMI waiver with medical professional home loans are given below:
- The maximum loan size is $4.5 million to purchase a home or investment property
- The maximum loan is 100% of the property value (borrowing more is possible at times)
- You must be a member of a relevant industry organisation such as AMA
- You must be a preferred medical professional such as a dentist, optometrist, veterinarian, chiropractor, pharmacist etc.
Exclusive discounts
Select healthcare professionals who qualify for doctor home loans can get a lower interest rate, borrow up to 100% of the property price, and avoid Lenders Mortgage Insurance (LMI), or both. Home loans for doctors differ from lenders, thus the type of discount you receive will be determined by the lender.
For instance, if you are buying a $900,000 home and borrowing the whole amount, you will be turned down by the banks unless you utilize a guarantor loan. Still, if you borrowed 95% of the property for $900,000, you would have to pay roughly $37,200 in mortgage insurance.
However, if you are an eligible medical practitioner, you can acquire a home loan without waiting to save a 20 per cent deposit or getting a guarantor. It might save these borrowers a lot of money and keep them from having to pay for something that has no financial advantage to them.
Build your real estate portfolio quickly
Home loans for doctors can be used to purchase a new home or refinance an existing loan to free up equity to buy other homes. You can borrow up to $4.5 million for your home and investment property. On a case-by-case basis, larger loans are available.
Doctor home loans can be structured correctly to build a solid real estate portfolio that creates additional wealth for you, not just as another home loan.
Who is eligible for a doctor home loan?
The interest rate discounts offered under the ‘Medico Package’ are not available to all medical practitioners. The following is a list of medical specialists who may qualify for medical specialist home loans:
- Anesthesiologist
- Anaesthetist
- Cardiologist
- Cardiothoracic Surgeon
- Chiropractor
- Sports chiropractor
- Animal chiropractor
- Clinical Pharmacologist
- Cosmetic Surgeon
- Dental Specialist
- Dentist
- Dermatologist
- Ear and Throat Surgeon
- Epidemiologist
- Emergency Doctor
- Emergency Medicine Specialist
- Emergency Surgeon
- Endocrinologist
- Gastro-Intestinal Surgeon (Upper/Lower)
- Gastroenterologist
- General Practitioner (GP)
- GP Registrar
- General Surgeon
- Gynaecologist
- Haematologist
- Heart Doctor
- Heart Surgeon
- Hepatologist
- Herpetologist
- House Medical Officer (HMO/residency)
- Hospital-employed doctors
- Intern doctor (internship)
- Immunologist
- Junior Medical Officer (JMO/residency)
- Kinesiologist
- Maxillofacial Surgeon
- Medical Administrator
- Medical Practitioner
- Medical Registrar
- Nephrologist
- Neurosurgeon
- Neurologist
- Neurophysiologist
- Obstetrician
- Oncologist
- Ophthalmologist
- Optometrist
- Oral and Maxillofacial Surgeon
- Oral Surgeon
- Orthodontists
- Orthopaedic Surgeon
- Orthopaedic Registrar
- Otolaryngologist
- Paediatric Surgeon (Neonatal/Perinatal)
- Paediatrician
- Paediatric Surgeon (Neonatal/perinatal)
- Pathologist
- Physiotherapist
- Pharmacist
- Clinical Pharmacy Specialist
- Academic Pharmacist
- Community Pharmacist
- Compounding Pharmacist
- Consultant Pharmacist
- Drug Information Pharmacist
- Home Health Pharmacist
- Hospital Pharmacist
- Industrial Pharmacist
- Informatics Pharmacist
- Locum Pharmacist
- Managed Care Pharmacist
- Military Pharmacist
- Nuclear Pharmacist
- Oncology Pharmacist
- Pharmacist Clinical Pathologist
- Pharmacist Clinical Toxicologist
- Regulatory-Affairs Pharmacist
- Pharmacist prescriber
- Veterinary Pharmacist
- Physician
- Plastic Surgeon
- Psychiatrist
- Radiologist
- Radiation Oncologist
- Resident doctor (residency)
- Reconstructive Surgeon
- Resident Medical Officer (RMO/residency)
- Respiratory Surgeon
- Respiratory/Thoracic Surgeon
- Rheumatologist
- Specialist Physician
- Surgeon
- Surgical Registrar
- Thoracic Surgeon
- Urologist
- Vascular Surgeon
- Veterinarian
On top of that, interns, residents, registrars, and staff experts may be eligible for a medical professional housing loan. This will depend on lender policies at a given time.
Are there any types of doctors not eligible?
Some medical professionals, such as medical research scientists and naturopaths, are not eligible for home loans for doctors. It is because the banks have conducted a statistical review of their current loan portfolios and determined that certain medical professions do not meet their risk appetite.
In saying that, if you have a strong employment history, good credit score and notable savings, you may still qualify for a lower interest rate!
Doctors need to be a member of an association
You must be a member of one of the following associations to be eligible for home loans for doctors:
- Australian Association of Practice Managers
- Australian College of Rural and Remote Medicine (ACRRM)
- Australian Dental Association (ADA)
- Australian Dental Council (ADC)
- Australian Medical Association (AMA)
- Australian Medical Council (AMC)
- Australian Veterinary Business Association
- Australian Veterinary Association
- Australasian College for Emergency Medicine (ACEM)
- Australasian College of Cosmetic Surgery (ACCS)
- Australasian College of Dermatologists (ACD)
- College of Intensive Care Medicine of Australia and New Zealand (CICM)
- Medical Practitioners Board of Australia
- Royal Australasian College of Dental Surgeons (RACDS)
- Royal Australasian College of Medical Administrators (RACMA)
- Royal Australian and New Zealand College of Obstetricians and Gynaecologists (RANZCOG)
- Royal Australian and New Zealand College of Ophthalmologists (RANZCO)
- Royal Australasian College of Surgeons (RACS)
- Royal Australasian College of Physicians (RACP)
- Royal College of Pathologists of Australasia (RCPA)
- Royal Australian and New Zealand College of Psychiatrists (RANZCP)
- Optometrists Association Australia
- The Australia and New Zealand College of Anaesthetists (ANZCA)
- The Royal Australian College of General Practitioners (RACGP)
- The Royal Australian and New Zealand College of Radiologists (RANZCR)
- Urological Society of Australia and New Zealand (USANZ)
Lenders might accept other associations as well but that would be on a case-by-case basis.
Is your income acceptable?
Lenders will accept most types of earnings. But they might require different proof of income in different situations:
- Salary income: If you are a salaried doctor,most lenders will require two or three of your most recent payslips, an employment contract (to consider any over time, allowance and shared billing) and a payment summary from your company.
- Business income: If you are self-employed, you must give your ABN (Australian Business Number) along with proof of income documents such as an ATO (Australian Tax Office) tax assessments for the previous two years, bank statements or an accountant’s letter.
All this income information will help the lender in understanding your financial status and properly assess your home loan application.
What discounts do doctors get?
Many lenders consider medical professionals to be valuable consumers and therefore offer reasonable rates in the hopes of retaining their business.
Lower or discounted interest rate and fees
Healthcare professionals may be eligible for special interest rates or deductions in their home loan rates. It might include a special home loan fee waiver for medical practitioners.
If you borrow less than 80% of the property value, the discounts are bigger. Medico loans are usually determined by whether the professional has a solid work history and a sizable savings account.
Higher loans-to-value ratio (LVRs)
Healthcare workers who qualify for doctor home loans can borrow up to 100% of the property value, and avoid Lenders Mortgage Insurance (LMI), or both with select lenders. It implies that you can secure a home loan without having to save a 20% down payment or find a guarantor.
Also, there is no need to validate deposits as genuine savings for mortgages up to 90% LVR. It will help you save a significant amount of time and money as you do not have to wait longer to enter the property market.
Other benefits
Healthcare professionals may enjoy other perks. It includes developing their property portfolio in less time and enjoying larger discounts on interest rates.
You can also get 100% financing on a commercial property used as a medical centre or private practice. In addition, several types of medical equipment can be financed. You can borrow the total cost of that equipment, often with no other security.
How to Apply for a Doctor Home Loan
Applying for home loans for doctors is similar to applying for a regular mortgage in the context of the required paperwork. All documents regarding identification, proof of income and job, expenses, credit score and so on need to be submitted to the lenders.
Personal Identification documents
- Primary photo identification, such as your current passport, driver’s license, proof of age card, and so on, falls into this category.
- If you are unable to supply any of these essential documents, lenders will want at least two secondary identification documents. E.g. your birth certificate, health care card, and citizenship certification.
- You will also require a copy of your employment contract or payslips to prove your medical profession.
Income documents
Your income details will assist the lender in understanding your financial status and weighing your home loan application.
- Most lenders will request two or three of your most recent payslips, an employment contract (to consider ongoing income, any over time, allowance and shared billing) and a payment summary from your company.
- You must produce your ABN (Australian Business Number) along with proof of income documents such as an ATO (Australian Tax Office) tax assessments for the previous two years, bank statements or an accountant’s letter.
How to Compare Doctor Home Loans?
While looking out for home loans for doctors, you need to look at several factors. Do not forget to compare these essential features from various lenders or brokers to narrow down your suitable alternatives.
Interest rates
The interest rate is a critical factor in any typical house loan. You must evaluate and compare the interest rates given by various lenders and determine whether or not you are qualified for any of those discounts.
Lenders Mortgage Insurance
One of the most appealing aspects of doctor house loans is the absence of LMI. It enables you to borrow up to 100% of the property value (depending on the lender) without having to pay an LMI fee.
Health workers can often borrow higher LVR loans amounting to 90 per cent (or even 100 per cent in some cases) of the property price without any LMI or guarantee requirement.
Fees
There are many fees and other costs associated with a home loan, including stamp duty charges. Always ask about these fees and make sure you understand them so that you know how much it will cost you.
Other features
Aside from the interest rate and costs, you should think about other elements that you need or want in your house loan appropriate for your financial situation. Benefits such as a redraw facility and a linked offset account may be included in your home loan.
FAQs
Are doctor discounts available with construction loans?
It is feasible to obtain discounts with a construction loan, such as 100 per cent no LMI or a lower interest rate, although this is not accessible from all lenders. Also, note that the types of discounts available will be determined by the style of construction.
Can we get finance for a medical practice or buy medical equipment?
Special lending rules apply to doctors buying, building or fitting out their own practice. You can borrow up to 100% of the costs of your practice from select lenders for medical practice property or medical practice loans.
Please note that in these types of loans, discounts in interest rates differ with the lender and are based on the strength of your application. In addition, you may be required to submit a business plan, which includes business projections.
Do nurses qualify for a doctor home loan?
Nurses and midwives may not be eligible for some of the advantages that other healthcare professionals are. But if they choose the right home loan deal, they may have their own benefits.
If nurses and midwives can demonstrate that they have consistent work and income, they can still qualify for waived Lenders Mortgage Insurance (LMI) home loan when borrowing up to 85 per cent of the property value.
Can I qualify for a doctor home loan as their partner?
Partners of medical professionals may also be eligible for a home loan with these benefits if they borrow together. However, this is entirely dependent on whether their partner (spouse or de-facto) is on the eligibility list. You can check above on this page to find out if your partner is eligible for doctor discounts.
Why should doctors use a Mortgage Broker?
It is a good idea to consult with an expert mortgage broker when looking for a home loan as a medical professional. The broker should be familiar with various loans and benefits that may be available to you and tailor a loan suitable to your personal situation.
There are several ways you can find a mortgage broker. Your loan process journey can be a lot easier and quicker if you use an experienced mortgage broker familiar with loan options for doctors and the exclusive interest rate discounts.
Working with a broker for your home loan can be beneficial in many ways.
They:
- Provide you with expert financial advice and information about home loan solutions tailored to your requirements
- Have up to date knowledge on suitable home loan deals and eligibility criteria of most of the banks and non-bank lenders
- May even have access to exclusive offers available only to mortgage brokers
- Can accommodate around your schedule and do all the legwork on your behalf
- Help you cruise through the entire process of application and pre-approval
- Ensure your loan application goes all the way to the settlement without any issues
- Are legally obliged under Best Interest Duty to act in your best interests
- Reduce stress by providing you with expert services, giving you more time and freedom to concentrate on other things
- Do not charge anything extra for their services, in most cases.
With these benefits and the fact that a mortgage broker is working diligently and taking care of your application process, you can focus on finding the right property.
You can start researching your home loan options by comparing multiple lenders and brokers in Australia online.
How to choose the best Mortgage Broker for a doctor home loan?
There are several brokers out there in the mortgage market claiming to be the best in the industry. It is tough to find the most appropriate one to assist you in your loan journey.
Here on AirBroker, we have a dedicated page to explain How to Find a Good Mortgage Broker. It can help you find the one who can guide you through this maze.
In addition, you can ask for recommendations from family, friends, neighbours or colleagues about the broker that they might have used. You can also check with a real estate agent or accountant for suggestions. Reading online reviews of mortgage brokers may give you insight into their past experience.
If you are thinking about acquiring a doctor mortgage, it is time to speak with a home loan expert. We can match your needs with the medical professional house loan for you with our expertise and industry experience!
We can assist you with obtaining a new loan, refinancing or learning more about mortgages for doctors and other medical professionals.
