Does a dentist get any discount on home loans?

Any general questions you might have in regards to loans and finance.
gleeson
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Does a dentist get any discount on home loans?

Postby gleeson » Tue Oct 14, 2014 11:11 am

Hi there,

I am a dentist and I work for a clinic in Canberra. I am thinking about buying a house. One of my friends is a surgeon and he said that medical professionals are eligible for various discounts on home loans. Do I qualify for such discounts? Could anyone tell me what kind of discounts may apply to a dentist applying for a home loan?

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Otto Dargan
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Re: Does a dentist get any discount on home loans?

Postby Otto Dargan » Tue Oct 14, 2014 12:01 pm

Hi gleeson,

Lenders regard dentists to be low risk borrowers due to their high income and social status. Therefore, many lenders have special provisions when giving home loans to dentists. These provisions include the following:
  • Waived LMI : Generally borrowers are required to pay Lenders Mortgage Insurance (LMI) if they are borrowing more than 80% of the property value. However, dentists may not have to pay LMI even when they borrow more than 80%. To qualify for waived LMI, they should not be borrowing more than 90% LVI and $4.5 million.
  • Interest Rate Discounts : Different lenders have different interest rates for different kinds of professionals. Since doctors are considered low risk professionals, many lenders provide interest discounts to doctors.
  • Commercial Purchases : Our lenders offer many discounts and packages to doctors who are buying a commercial property.
  • Medical Equipment Purchase : Dentists who want to buy medical equipment may be able to borrow the full cost of the equipment.
Cheers,
Otto
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gleeson
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Re: Does a dentist get any discount on home loans?

Postby gleeson » Tue Oct 14, 2014 12:34 pm

Hi there,

I am planning to buy a house worth about $1 million. I can put $150,000 as the deposit for the house. What may be my best option?

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Otto Dargan
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Re: Does a dentist get any discount on home loans?

Postby Otto Dargan » Tue Oct 14, 2014 1:45 pm

Hi gleeson,

You are planning on buying a house worth $1 million and you are willing to make an initial deposit of $150,000, which is 85% of the property value. Normally, lenders require borrowers to pay LMI premium when they are lending more than 80% of the property value. There are different options available to you.

If you do not have any additional funds at your disposal, the best thing for you would be to look at the different lenders and choose the one that waives your LMI premium. You can compare the interest rates and LMI premiums of different lenders through our LMI calculator to get an estimate of the best deal that you may be able to get.

However, LMI premium is not the only thing that affects the cost of your loan. The interest rate is another crucial factor you should take into account while determining your actual cost. So, if you can increase your initial deposit to $200,000, then you would have 80% LVR for your $1 million house. Then you would not need to pay LMI anyways, therefore you can look around for the best interest rate so that you can take out a loan at the minimum cost possible.

The matters involved in the process of taking out a loan can be complicated as you need to consider multiple factors simultaneously. Therefore, it may be best to get an expert advice from a registered mortgage broker.

If you need more information regarding your home loan application then you can call us on 1300 889 743 or fill out our free assessment form.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

gleeson
Posts: 58
Joined: Mon Jun 15, 2009 12:15 pm

Re: Does a dentist get any discount on home loans?

Postby gleeson » Tue Oct 14, 2014 2:32 pm

Hi Otto,

Thank you for the valuable insight. The different options seem to make the issue even more complicated. I am sure some professional help would be helpful to me. I will contact you guys as soon as possible.

Thanks.

cjracey
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Re: Does a dentist get any discount on home loans?

Postby cjracey » Wed Jan 07, 2015 12:11 pm

Hi there,

I am a dentist practicing in Sydney. I am also planning to buy a house for $650,000. I can put $170,000 as the deposit, which makes the LVR less than 80%. Therefore I would not have to pay LMI. Therefore I am more interested in the discounts on interest rates. What wil be the size of the discount that I will get?

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Otto Dargan
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Re: Does a dentist get any discount on home loans?

Postby Otto Dargan » Wed Jan 07, 2015 1:12 pm

Hi cjracey,

The discount that you may receive on your interest rate depends on various factors such as:
  • The size of your mortgage.
  • Whether you are combining your interest rate discount with LMI waiver.
  • Whether you are a registered member of the Australian Dental Association.
Normally, getting a standard professional package allows you to get an interest discount of up to 0.7% below the standard variable rate without any negotiation. It may be possible for you to get the following discounts if you negotiate with the lenders:
  • 1.00% below the standard variable rate for loans over $250,000.
  • 1.10% below the standard variable rate for loans over $500,000.
  • 1.10% to 1.15% below the standard variable rate for loans over $1,000,000.
  • 1.15% or more below the standard variable rate for loans over $1,50,000.
  • Case by case negotiations on discounts for loans over $2,500,000.
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

cjracey
Posts: 52
Joined: Mon Jun 15, 2009 12:13 pm

Re: Does a dentist get any discount on home loans?

Postby cjracey » Wed Jan 07, 2015 2:34 pm

Thank you for taking the time to respond. I will call your office in a few days to discuss my options in detail.


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