Home Loans For Doctors
Home loans for doctors were created by the Australian lenders because they favour doctors above all other professions. From a risk perspective doctors are known to be low risk borrowers, earn high incomes, and often approach the bank later in life for a business or investment loan.
Doctors have one of the lowest default rates of any profession and are considered highly profitable clients by lenders.
How do home loans for doctors 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 lender will lend up to $4.5 million for your home and investment properties. Larger loans are available on a case by case basis.
- Lenders create these products to attract doctors.
- Home loans for doctors offer special discount not available to normal 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?
Home loans for doctors are not available to all doctors. Below is a list of preferred medical professionals:
- Cardio Thoracic Surgeon
- Clinical Pharmacologist
- Cosmetic Surgeon
- Dental Specialist
- Ear and Throat Surgeon
- Emergency Medicine Specialist
- Emergency Surgeon
- Gastro Intestinal Surgeon (Upper/Lower)
- General Practitioner
- General Surgeon
- Intern (Hospital Employed)
- Oral and Maxillofacial Surgeon
- Orthopaedic Registrar
- Orthopaedic Surgeon
- Paediatric Surgeon (Neonatal/Perinatal)
- Plastic Surgeon
- Reconstructive Surgeon
- Resident Medical Officer
- Residents (Hospital Employed)
- Respiratory/Thoracic Surgeon
- Specialist Physician
- Staff Specialists (Hospital Employed)
- Vascular Surgeon
- Interns, residents, registrars, and staff specialists in the above fields are also eligible.
Associations you must be part of.
To be eligible for a doctor home loan, you must also 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!
Making sure your income is accepted.
In some cases, doctors have unusual income structures that are not accepted by all banks. Typically, these include doctors that are receiving medicare income guarantees, contracting, self employed or have a partnership style businesses.
As long as you can provide evidence of your income then you can usually find a suitable 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 lender 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 105% of the property value if your parents guarantee your loan.
Why do doctors get discounted interest rates?
Normal borrowers who are borrowing less than 80% of the property value are not required to pay LMI. Lenders love doctors and will often offer discounted interest rates in order to get the business.
Home loans for doctors were created for the very reason – lenders are fighting to get your business. For best results speak to a mortgage broker who has a special relationship with one of these lenders and have them seek the best possible 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 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 your chances of approval.
- You must be an experienced doctor.
- You must have a high income.
- you must have some money of your own to contribute to the project.
Financing your medical equipment as well.
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.
If you’re considering getting a loan to finance your commercial property you may want to consider including your medical equipment. Finance for new equipment can be obtained with either a lease, hire purchase, or chattel mortgage.
Benefits of going down this path include:
- You can borrow the full cost of the equipment.
- There is no need to provide any other security.
- We can obtain quotes from several competitive lenders.
- We can obtain 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?
Yes it’s possible to get discounts such as waived LMI and or a discounted interest rate with a construction loan, however 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.