Home Loans For Dentists
Not everybody is scared of the dentist’s drill: Some banks love dentists!
Did you know that dentists may be eligible for special discounts on their home loan that aren’t available to the general population?
What are the banks offering?
- Larger interest rate discounts on their professional packages.
- Waived Lenders Mortgage Insurance (LMI).
- Higher exposure limits for investors with several properties.
- Flexible credit criteria for new graduates and new dental clinics.
Speak to our mortgage brokers by calling 1300 889 743 or fill in our free assessment form to find out if you can qualify for a discount.
Which professions are preferred?
Are you one of the following dental professionals?
If so, you’ll have a better chance of qualifying for dentist home loan discounts:
- Dental specialist
- Oral Surgeon
- Orthopaedic Surgeon
Are you member of a dental association?
You typically need to be a member of either the Australian Dental Association (ADA) or the Australian Dental Council (ADC).
However, other industry associations may be accepted.
Interest rate discounts
The size of the discount that we can get you will depend on if you are a member of the Australian Dental Association (ADA), your salary, rent income and the amount that you are borrowing.
Larger home loans will attract a sharper interest rate.
You can view our interest rates page to see which discounts are available for larger home loan sizes and fixed rate loans.
Larger discounts than those published on our website may be available by negotiation with our lenders.
No LMI home loans
Buying your first home can be a challenge.
Most first home buyers have a small deposit and are just starting out in their careers.
Unfortunately, if you don’t have a 20% deposit then the banks see you as a higher risk and insure your loan using Lenders Mortgage Insurance (LMI).
You’re left to foot the bill for the LMI premium which can be tens of thousands of dollars.
Dentists are a lower risk than other borrowers so some of our lenders are willing to approve your loan without any mortgage insurance!
What are the criteria to get your LMI waived?
- Your home loan must not exceed 90% of the purchase price (90% LVR).
- You must be a member of the Australian Dental Association (ADA) or other acceptable medical association.
- You must be a dentist, periodontist, ear and throat surgeon or oral and maxillofacial surgeon.
- There is no minimum income requirement.
- Your application must be within normal bank policy.
Dental hygienists and other staff that work in a dental clinic are not eligible for waived LMI but they may be eligible for a reduced interest rate.
Talk to our mortgage brokers by calling 1300 889 743 or complete our free assessment form to find out which bank is the best for you.
Can I use this to build a property portfolio?
Many dentists use the waived LMI to buy several investment properties with smaller deposits.
You can borrow up to $4,500,000 in total through one of our lenders and over $2,000,000 with another.
That’s a total of $6,500,000 in home loans which can allow you to buy up to $7,000,000 of property without paying any LMI.
If you decide to buy a large number of properties then you should consider income protection, life and Total Permanent Disability insurance to protect yourself in the event of unforeseen circumstances.
It’s fine to invest aggressively if you manage your risk.
Which bank is best for mortgages for dentists?
There are three lenders that offer exceptional discounts for dentists.
Choosing the right lender depends on:
- The size of your deposit.
- The number of properties that you plan to buy.
- The complexity of your situation e.g. trusts, self-managed superannuation funds and company structures.
- If you plan to open your own dental clinic or expand your existing business.
- If you are a member of the Australian Dental Association (ADA).
- If you and your partner have an unusual situation that is outside bank policy.
In some cases, it is best to split up your loans for different properties between different lenders to maximise your benefits.
Finance for dental clinics
When you decide to open your own clinic, it’s possible to obtain a dental practice loan that will allow you to borrow 100% of the commercial property value including the fit-out and dental equipment.
Banks believe that dentistry is a stable, profitable industry and they want to help you to build your business.
This is a vastly different approach to the way they finance other businesses, focusing a lot more on risk, instead.
How do you earn a living?
In some cases, dentists and orthodontists have unusual income structures that are not accepted by all banks.
Typically, this includes dentists that are receiving medicare income guarantees, contracting, self employed or have a partnership style businesses.
It’s not uncommon for dentists to be contractors or sub contractors for a hospital.
That’s because workloads at clinics can change infrequently, requiring a need for dental professionals to be “on call” or employed on a locum basis.
Ultimately, it depends on the terms and conditions of your work arrangement – just because you have an Australian Business Number (ABN) and a registered business name doesn’t mean you’re a contractor in the traditional sense of the word.
For example, you may invoice for work done but will still be considered an employee for tax purposes.
As long as you can provide evidence of regular and ongoing income then you can usually find a lender that can accept your application.
Example of a subcontractor working for a private clinic
After completing her degree and training in orthodontology, Dr Rebecca spent 3 years working at one of Queensland’s largest dental practices.
With dreams of a better work life balance so she could travel the world, she felt she had the skills to subcontract to other private clinics.
After speaking to an accountant and organising her Australian Business Number (ABN), Dr Rebecca won a contract to work full-time at a local family and cosmetic dentistry.
With guaranteed work from her employer, she quit her PAYG role in early September.
Dr Rebecca was earning a signficantly higher income subcontracting and enjoying the flexibility of being able to take more holidays.
Around August the following year, she decided that she want to buy an investment property.
After providing her financials for your home loan application, she hit a wall with her application.
Firstly, she had only been working as a subcontractor for less than one financial year.
Most lenders require that you be earning a regular income from contract work for at least 2-3 years.
Secondly, her PAYG income on her Notice of Assessment (NOA) only showed $27,000 because she had quit her full-time role in September.
To the bank, her income showed that she wasn’t earning enough to afford or “service” a home loan.
This is despite the fact that she was earning around $114,000 per annum or around $10,000 per month.
It was a classic case of a bank showing no common sense.
Not sure what to do, Dr Rebecca spoke to a mortgage broker that specialised in helping self-employed medial professionals.
There are many doctors, dentists and optometrists that subcontract their skills and time to a number of practices and we see this on a regular basis.
At the request of the broker, Dr Rebecca was able to provide consecutive payslips for May and June showing the services provided to clients at the clinic.
Here is an example of what one of her payslips looked like.
Her payslips clearly showed the company logo on the letterhead as well as the company ABN and her commission rate.
Speaking with the relationship manager at the bank, her broker was able to show that she had been working in the dental industry for the past 3 years prior to switching to subcontracting.
He was able to do this by providing the bank with her last 3 years NOAs.
By explaining her case to the bank using common sense, the mortgage broker was able to convince the bank to take into account her income from her previous role.
This is a signficant exception to the lending policies of most banks.
In this way, Dr Rebecca was able to get pre-approved for a $1.17 million home loan at 90% LVR.
Because of her profession, she saved around $31,000 on LMI and made further savings with a significant interest rate discount.
Apply for a dentist mortgage
Would you like to buy a home or investment property?
Find out which bank will give the best discounts on mortgages for dentists!
Call us on 1300 889 743 or complete our free assessment form today.