Home loans for doctors were created by Australian lenders because they favour doctors above all other professions.
Doctors are known to be low risk borrowers because they tend to earn high incomes and approach the bank later in life for a business or investment loan making them more reliable borrowers.
Doctors have one of the lowest default rates of any profession so they’re in a unique position to negotiate significant discounts that aren’t available to other borrowers.
Want to know if you qualify for home loan discounts?
Talk to our experts and get a free assessment.
How does it work?
In Australia, home loans for doctors are mortgages offered by lenders to certain types of doctors.
These types of mortgages differ from normal mortgages due to the following reasons:
- The maximum amount that you can borrow is usually higher than what is offered to the public. For example, some lenders will lend you up to $4.5 million for your home and investment properties while larger loans are available on a case by case basis.
- Special discounts that are exclusive to medical professionals and not to standard borrowers.
- Home loans for doctors can be used to buy a new property or refinance your existing loan to buy more properties.
Which types of doctors are eligible
Not all doctors are considered eligible for the ‘Medico Package’ discounts. Below is a list of preferred medical professionals:
- Anesthesiologist
- Anaesthetist
- Cardio Thoraci Surgeon
- Cardiologist
- Cardiothoracic Surgeon
- Chiropractor
- Clinical Pharmacologist
- Cosmetic Surgeon
- Dental Specialist
- Dentist
- Dermatologist
- Doctor
- Ear and Throat Surgeon
- Emergency Doctor
- Emergency Medicine Specialist
- Emergency Surgeon
- Endocrinologist
- Gastro Intestinal Surgeon (Upper/Lower)
- Gastroenterologist
- General Practitioner
- General Surgeon
- GP
- GP Registrar
- Gynaecologist
- Haematologist
- Heart Doctor
- Heart Surgeon
- Hepatologist
- Herpetologist
- Immunologist
- Intern (Hospital Employed)
- Maxillofacial Surgeon
- Medical Administrator
- Medical Practitioner
- Medical Registrar
- Nephrologist
- Neuro Surgeon
- Neurosurgeon
- Neurologist
- Obstetrician
- Oncologist
- Opthalmologist
- Optometrist
- Oral Surgeon
- Orthodontists
- Orthopaedic Surgeon
- Otolaryngologist
- Paediatric Surgeon (Neonatal/Perinatal)
- Paediatrician
- Pathologist
- Pharmacist
- Physician
- Physiotherapist
- Plastic Surgeon
- Psychiatrist
- Radiologist
- Radiation Oncologist
- Reconstructive Surgeon
- Registrar
- Resident Medical Officer
- Residents (Hospital Employed)
- Respiratory Surgeon
- Rheumatologist
- Specialist Physician
- Staff Specialists (Hospital Employed)
- Surgeon
- Surgical Registrar
- Thoracic Surgeon
- Urologist
- Vascular Surgeon
- Vet
- Veterinarian
Yes, interns, residents, registrars and staff specialists are all eligible!
In addition, some of our lenders favour specific specialists such as anaesthetists, psychiatrists, obstetricians and radiologists.
You must be an association member
To be eligible for a doctor home loan, you must be a member of one of the following associations:
- 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)
- Other associations on a case by case basis
Which types of doctors are not eligible?
Home loans for doctors are not available to some medical professionals such as psychologists, medical research scientists, and naturopaths.
This is because banks have completed a statistical analysis of their existing loan portfolios and have identified certain professions to be a higher risk than other medical professionals.
Don’t worry, you may still receive a reduced interest rate if you have a strong employment history and substantial savings!
Is your income acceptable
In some cases, doctors have unusual income structures that are not accepted by all banks.
Typically, this includes doctors that are receiving medicare income guarantees, contracting, self employed or have a partnership style businesses.
It’s not uncommon for doctors to be contractors or sub contractors for a hospital or a private practice.
That’s because workloads at medical centres can change infrequently, requiring a need for medical 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.
In addition, you could be a full-time employee with a practice but work on a contract basis for a hospital as a medical specialist.
As long as you can provide evidence of regular and ongoing income then you can usually find a lender that can accept your application.
What discounts do doctors get?
Medical practitioners who are eligible for doctor home loans can get either an interest rate discount, a lenders mortgage insurance (LMI) waiver, or both.
Home loans for doctors vary from lender to lender so the type of discount will depend on the lender.
For example, if you’re buying a home for $1,000,000 and borrowing $900,000 then you would normally pay around $24,500 in LMI.
As you can see, this is an incredible discount!
Why do lenders waive Lenders Mortgage Insurance?
Lenders require most borrowers to pay lenders mortgage insurance (LMI) if they are borrowing more then 80% of the property value.
This one-off fee pays for an insurance policy that covers the bank for losses they incur if you cannot repay your mortgage.
Lenders love doctors.
They see doctors as low risk borrowers.
Their data shows that doctors have a low chance of missing a repayment due to their high incomes.
For these reasons, lenders will often create specific polities for doctors with benefit not generally open to the public.
Here are some examples of waived lender mortgage insurance (LMI) discounts.
- Borrow up to 90% of the property value without paying any LMI.
- Borrow up to 90% of the property value without paying any LMI.
- Borrow up to 105% of the property value if your parents guarantee your loan.
Why do doctors get discounted interest rates?
Lenders love doctors and will often offer discounted interest rates in order to get the business.
They will even offer sharp pricing on upfront application fees and ongoing account-keeping costs.
Home loans for doctors were created for this very reason: lenders are fighting to get your business.
For the best results, speak to a mortgage broker who has a special relationship with one of these lenders so they can negotiate a competitive interest rate discount on your behalf.
Golden tips to maximise your discounts.
- Make sure you ask specifically about home loans for doctors.
- If you’re borrowing over 80% of the property value then it’s best to focus on getting waived LMI.
- If you’re borrowing less than 80% of the property value then you’ll not pay LMI anyway so it’s better to focus on getting a competitive interest rate discount.
- If you’re buying a commercial property then other discounts and packages are available.
- If you’re buying medical equipment then you can borrow the full cost, often with no other security.
- Make sure the broker you’re dealing with has access to many lenders, including your bank.
- Make sure the broker you’re dealing with knows which lenders are currently pricing aggressively to win market share.
- Maximum discounts are not advertised or published by lenders so make sure your broker knows the limits that they can negotiate to.
- Always ask about fees. Services are generally free except for short term loans and complex situations.
What about getting a finance for a commercial property?
Did you know that special lending rules apply to doctors who are buying, building or fitting out their own medical practice?
Normally you would be allowed to borrow up to 75% or possibly 80% of the value of a commercial property.
However, for a medical centre or practice, it’s possible to borrow up to 100% of the property value with a commercial loan.
Golden tips to maximise approval.
Lenders require most borrowers to pay lenders mortgage insurance (LMI) if they are borrowing more then 80% of the property value.
This one-off fee pays for an insurance policy that covers the bank for losses they incur if you cannot repay your mortgage.
Lenders love doctors because they’re seen as low risk borrowers.
Their data shows that doctors have a low chance of missing a repayment due to their high incomes.
For these reasons, lenders will often create specific polities for doctors with benefit not generally open to the public.
Here are some examples of waived lender mortgage insurance (LMI) discounts.
- Borrow up to 90% of the property value without paying any LMI.
- Borrow up to 105% of the property value if your parents guarantee your loan.
Financing your medical equipment.
Medical equipment is usually the largest non-property expense associated with setting up your own practice.
Investing in good quality equipment can significantly increase the returns for your business.
With a medical practice loan, you can borrow 100% of the costs of your practice, including fit-out and the cost of medical equipment.
Other benefits include:
- You don’t have to provide further security.
- We can obtain quotes from several competitive lenders.
- We can get you a quick approval and settlement.
Types of medical equipment you can finance.
Almost any type of medical equipment can be financed. This includes:
- Diagnostic imaging equipment.
- Medical monitoring devices.
- Medical laboratory equipment.
- Medical software (e.g. Radiology Information System / Picture Archiving and Communication System).
- Office, surgery or clinic fit-outs.
Are doctor discounts available with construction loans?
It is possible to get discounts such as waived LMI or a discounted interest rate with a construction loan but this isn’t available from all lenders.
The types of discounts that are available will also depend on the type of construction:
- Contract builder / normal construction: Waived LMI and discounted interest rates are available. A renovation or knock down and rebuild are both acceptable with a licenced builder.
- Cost plus construction: Discounted interest rates are available.
- Owner builder: Discounts are available by exception only.
- Medical centre construction: Discounts are available if you’re building a medical centre or practice for your business.
- Small development loans: Pricing is not based on your profession unless residential property is offered as security.
A home loan or development loan that funds a construction project is normally split into two separate loans.
One is secured by the land or original building and is advanced when you purchase the property or refinance to your new bank.
The second loan is for construction purposes and is progressively drawn as the builder requests each progress payment.
Home loans for doctors FAQs
Do nurses qualify for home loans for doctors?
Nurses don’t qualify for doctor home loans because lenders don’t consider them as high pay customers like doctors.
However, you can still qualify for waived Lenders Mortgage Insurance (LMI) up to 80% of the property value if you can prove that you have stable employment and income.
You may also qualify for discounted interest rates if you borrow over $250,000.
You can learn more about home loans for nurses on our nurse home loans page.
Will I qualify for a doctors home loan if my partner is a medical professional?
You can qualify for doctors home loan if you’re borrowing together with your partner, given that your partner is an eligible type of doctor.
If your partner is a medical professional who’s not eligible for home loans for doctors, then you may not qualify for this type of mortgage.
You can refer to the list of preferred medical professionals above in this page to find out if your partner is eligble for doctor discounts.
How much can I actually save by avoiding LMI?
Are you looking to buy a luxury property to live in?
When borrowing over $1 million, LMI premiums go through the roof.
More importantly, finding an LMI provider that will insure your mortgage becomes harder which means it’s even tougher to get approved.
Let’s just say you’re a doctor, you currently own your own home and you want to buy an investment property in New South Wales at 90% LVR. That means you’re borrowing 90% of the property value.
By going with a lender that waives LMI, here’s how much you could save:
| Property value | LMI premium saved |
|---|---|
| $500,000 | $9,752 |
| $1,000,000 | $24,750 |
| $1,500,000 | $39,436 |
| $2,000,000 | $52,582 |
Use our LMI calculator to find how much you could save.
Note: The calculator only provides LMI premiums for loans up to $1 million.
Can I still get all of the same home loan features?
Even though doctors qualify for interest rate discounts and waived LMI, they can still get basic and professional packages along with all of the common features including:
Example of waived LMI
The situation
Dr Wood recently became a qualified heart surgeon and has been registered at Westmead Hospital for the past year.
After speaking with his accountant and his partner, he decides it’s time to buy his first investment property.
He finds a couple of units in a newly-built apartment building in Redfern worth $400,000 each.
The solution
After speaking with his mortgage broker, he finds out that with a 10% deposit for each property or $80,000 all up, he can avoid the cost of LMI with a couple of major lenders.
LMI amounts to around 2% of the property value so, all up, Dr Wood saves over $15,000 in LMI for both properties.
The result
Dr Wood was able to put these savings towards the other costs of completing the purchase including conveyancing and stamp duty.
Example of a self-employed radiologist
The situation
Having built up skills, experience and a good reputation working as a full-time PAYG at District of Workforce Shortage (DWS) locations in Broken Hill and Dubbo, Dr Bill wanted to chase more lucrative opportunities as a registered rediologist.
After speaking with colleagues, he was considering applying for a Australian Business Number (ABN) and subcontracting out to clinics and practices in Melbourne, a city where he wanted to make his permanent home.
He was a little concerned with getting regular work but his previous employers were able to provide great references and put him into contact with three prive hospitals around the Melbourne CBD.
The clinics needed a radiologist to handle the large workload as they had recently lost their specialists.
Dr Bill was ready to take the leap, resigned from his PAYG role and moved down to Melbourne.
For the first month, he shared a flat with a friend but he had his eyes set on an upmarket unit in South Yarra, close to cafes and restaurants.
The sale price of the unit was around $1.1 million.
From his contract work, he was earning around $20,000 per month, with the opportunity to pick up more shifts.
He didn’t think he’d have any problem in getting approved for a home loan but when he applied with his bank, they knocked him back.
Even though he was getting regular work and earning a great income, most banks treat medical professionals that subcontract as self-employed borrowers.
This in itself isn’t an issue but the problem happens when you have less than 2 years work history and cannot provide at least 2 tax returns showing consistent year-on-year income from contract work.
It was a classic case of a bank showing no common sense.
The solution
A mortgage broker assessed Dr Bill’s situation and was able to find a bank that could help as an exception to standard lending policy.
Firstly, Dr Bill was able to provide his last three invoices from his contract work, which looked a little like this.
Secondly, he provided his last two Notices of Assessment (NOA) showing his after-tax income for his previous PAYG role.
All up, Dr Bill had worked as a qualified radiologist for around 6 years and because he was now working as a sole source subcontractor, the broker was able to get an exception with the banker at the lender.
It also helped that our brokerage had a good relationship with the bank.
The result
Dr Bill was approved for $990,000 at 90% of the property value.
He was able to avoid the cost of LMI and qualified for a significantly reduce interest rate.
Dr Bill is now enjoying his new Melbourne lifestyle and earning a great income from his subcontracting work.
Example of financing a large construction project
The situation
John and Samantha decided that their North Sydney home needed a makeover and went to a private lender to finance the substantial renovation.
As a radiologist and a GP they were eligible for medical industry discounts.
However, they were building using a cost plus contract and this particular bank wouldn’t accept it.
The solution
After being knocked back, John and Samantha spoke to a mortgage broker who negotiated with several lenders on their behalf.
By speaking with the key decision makers, the broker managed to get a negotiated interest rate and acceptance of the couple’s proposed building contract.
The key was to provide additional evidence of the cost of construction and to make sure there were extra funds on standby in case of a cost overrun.
The result
The home loan was approved at a better rate than their previous bank could offer.
The broker even organised for a local branch manager to liaise with the couple so that they could get a similar experience to private banking without paying the higher interest rates.
John and Samantha’s home was completed in six months and they’ve enjoyed their new home ever since.
Example of buying multiple investment properties
The situation
Having built up a successful optometry practice over the last 5 years, Dr James wanted to add to his investment property portfolio.
At the time, he had a $1.2 million mortgage on his own home and around $600,000 owing on a couple of units he held as investment properties.
After doing his research, he found some great investment opportunities in a few locations around Australia.
Dr James wasn’t getting any younger and he wanted to have a good nest egg for him and his family.
He knew if he didn’t move quickly, the properties would get snapped up by savvy investors.
He set his sights on four properties:
- A unit in Carlingford worth $300,000
- A standard house in Redcliffe worth $460,000
- A townhouse in Blacktown worth $500,000
- Another unit in Fitzroy worth $400,000
Dr James approached his bank to apply for the home loans but the bank was only able to approve him for one or two.
He earned a good income from his practice and he had a good deposit which included equity in his existing properties. What was the problem?
Well, his total debts to buy the four properties plus his existing home loans exceeded $1.5 million.
This exceeds most lenders’ mortgage exposure limits, which is the level of debt they’re willing to accept for any one customer.
The solution
In a bind, he turned to a mortgage broker for help and found out that some lenders are willing to accept up to $10 million in exposure.
However, rather than simply applying with one lender that had high exposure limits, the mortgage broker suggested that Dr James spread his risk across multiple lenders and multiple LMI providers.
The reason is that several lenders may fall under the same ownership structure which means he risked reaching their total banking group exposure in the long run.
He is also able to avoid paying a much higher LMI premium for each purchase.
The result
Dr James was able to rapidly to grow his portfolio with the addition of the four properties.
With his mortgage broker on his team, he is also able to better manage his mortgage strategy so he can continue to buy real estate without exceeding bank exposure limits.
