Why are medical professionals favoured by lenders?
Lenders have specific policies, offers, and concessions, in line for the medical professionals, which they do not make available to the general public.
They have strict policies to ensure their clients do not default on their loans. But, they also realise professions with lower risks in borrowing, so, they are comparatively lenient with them.
Lenders consider medical professionals low-risk borrowers, as they:
- Earn a higher than average income
- Have a stable income stream enabling timely repayments
- Borrow higher loan amounts than other customers
- Rarely default
Benefits in home loans for medical professionals
There are various offers and concessions in the home loan process that are made available for medical professionals.
Although these benefits can differ on a case-by-case basis, here are some benefits you most certainly can claim.
Waived LMI fees
LMI (Lender Mortgage Insurance) fees apply if your loan amount is over 80% of the property value.
However, if you are a medical professional, you can save thousands of dollars on LMI fees. Lenders waive your LMI fees or charge no LMI fees at all as a part of your special mortgage benefits.
Even if you borrow up to 100% of the property value, you still qualify for this benefit.
So, it is advisable for you to opt. for this benefit if you plan on borrowing more than 80% of the property value.
Do I qualify for a waived LMI if I apply for a joint home loan with someone who is not from the medical field?
To get the benefit of waived LMI if you’re jointly applying for a home loan with a partner who is not from a medical field, at least one applicant has to be from a medical profession.
As long as one of the borrowers is working as a medical professional, then you can apply for a waived LMI home loan.
Making a minimum deposit
For the medical professional home loans, the maximum amount you can borrow is higher than for the general public.
The higher the LVR (loan to value ratio), lower the deposit you need to make.
An LVR up to 95% is standard among the medical professionals. Which means a minimum deposit of 5% is all you need to make.
Among medical workers, too, ones with a comparatively higher income can make lower deposits.
No deposit home loans where you can borrow up to 100% of the property value is also available for certain high earning professions.
You can use our no deposit calculator to see if you qualify for a no deposit home loan.
In case you want to have a guarantor on board, you may do so and still make a minimum deposit.
The guarantor home loan and no/low deposit scheme for medical professionals will not overlap. Hence, you can enjoy the benefits of both.
Low interest rates and discounted fees
Most lenders provide progressive variable and fixed interest rate options to the medical workers.
Fees charged by lenders for the application process are either discounted or waived off on a case-by-case basis.
Which medical professionals qualify for waived LMI?
When someone says ‘medical professional’, it is either narrowed down to defining only doctors and nurses or is confused with a healthcare worker.
This misassociation brings confusions as to which professions fit in on the eligibility criteria for the home loans for medical professionals.
Listed below are all the medical professionals eligible for medical professional home loans:
- Cosmetic surgeons
- General practitioners; interns and residents
- Specialists like Cardiologists, Gynecologists, Neurologists, Oncologists, and Rheumatologists
- Plastic Surgeons
- Psychiatrists and Psychologists
- Staff specialists
If you are one of the above-listed professionals, another thing to be mindful of is the place you acquired your practice license from.
Eligibility criteria for listed medical professionals
You need to be a medical practitioner in Australia or Newzealand and be a member of a registered medical association.
Your membership registration type also determines your eligibility.
The acceptable registration types are:
- Generalist registration
- Specialist registration
The unacceptable registration types are:
- Provisional registration
- Limited registration
- Non-practising registration
Note: Non-practising registration may be accepted by some lenders in case of a temporary absence from practise (e.g. When on parental leave)
Specific Income Documents required: If you are an employee, you will have to submit any two or three of your recent (no older than 4 months) payslips and employment summary. If you are self-employed, lenders will ask for your ABN (Australian Business Number), and tax assessment reports from the ATO (Australian Tax. Office)
Note: Most lenders will require you to have worked as a medical professional for at least two years to be eligible for any of their exclusive schemes. Else, they will not even look at your home loan application.
Who are not eligible?
Even if psychologists, naturopaths, and medical research scientists are medical professionals, they do not qualify for the medico loans, also known as the medical professional home loans.
Lenders classify these professions as relatively high-risk, the very reason for them to be excluded from the scheme.
However, they may still get some benefits like interest rate discounts.
Listed below are some medical professions that are not eligible for medical professional home loans, according to majority of lenders:
- Dental hygienist
- Dental prosthesis
- Herbal medicine practitioner
- Medical radiation practitioner
- Oral health therapist
Exclusive home loans for particular jobs
Some jobs rank higher in the low-risk category of lenders than other jobs in the medical profession.
For such jobs, most lenders, including the big four banks, have specific home loans with additional benefits.
Some of such job-specific home loans are:
- Home loans for doctors
- Home loans for dentists
- Home loans for veterinarians
- Home loans for pharmacists
Are you a medical professional?
Home loans for medical professionals can have various offers and concessions available, which differ from lender to lender.
To link-up with the best lenders that suit your profile and needs, we suggest you take the route of consulting a mortgage broker.
Our specialist mortgage brokers have their expertise in professional loans. They can make your home loan process much smoother and efficient.
For further process, please complete our free assessment form. You can also call us on 1300 889 743 to discuss your situation with one of our specialist mortgage brokers.