Home loans for medical professionals
Medical professionals may be able to borrow up to 100 per cent of the property price without paying any Lenders Mortgage Insurance and can also access exclusive discounts from various lenders.
Benefits of home loans for medical professionals
Applying for a specialist medical profession mortgage could allow you to enjoy one or more
No Lender’s Mortgage Insurance (LMI)
Other special offers may be available to medical professionals applying for home loans.
A lower deposit / higher Loan to Value Ratio (LVR)
Special offers may be available to medical professionals applying for home loans.
Lower interest rates & discounted fees
Other special offers may be available to medical professionals applying for home loans.
Specialist home loans for medical professionals
It‘s not easy being a medical professional – you’re spending hours on the frontline to provide the best possible care for your patients. Unsurprisingly, as a medical professional, you often have a hectic routine, which leaves you with little time to deal with personal matters like finding a home loan that suits your needs.
If you’re a doctor or another type of medical professional, you would be glad to know that you’re eligible for specialist medical home loans. Generally speaking, medical professionals have always been considered low-risk borrowers by lenders, owing to the importance and stable nature of your job. Being considered low-risk puts you in a unique position to get exclusive offers on your home loan that may not be available to other borrowers.
Whether you are purchasing a new home or refinancing your existing mortgage, you may be eligible for huge savings on your loan, such as:
- Increased Loan-to-Value Ratio (LVR) – Borrow up to 100 per cent of the purchase price of the property.
- Lenders Mortgage Insurance (LMI) Waiver – Doctors are eligible for high LVR loans without paying ana LMI premium, saving you thousands in up-front costs.
- 100% Offset Account – Some specialist home loans for medical professionals offer a 100% offset account, which could help you save money on interest.
- Additional Benefits – As a medical professional, you may also be eligible for other benefits like lower interest rates or fees.
- Umbrella Loan Facility – Several lenders offer medical loan products like a global portfolio facility that lets you manage your other loans (like your education or investment loan) under one umbrella loan facility.
What is LVR?
Loan-to-Value Ratio or LVR refers to the percentage of the money you may borrow for a home loan compared to the value of the property you intend to buy. Lenders are most comfortable offering home loans with an LVR lower than 80 per cent. Otherwise, you may have to pay LMI or have someone go guarantor unless you’re a medical professional who is eligible for a specialist home loan.
What is LMI?
Lenders Mortgage Insurance or LMI is a premium paid to protect the lender against any losses incurred if you default on your loan in the future. However, medical professionals represent a low-risk category of borrowers owing to the stable nature of their job, which makes them eligible for an LMI waiver and saving thousands in up-front costs.
An LMI premium is calculated based on your loan size and it only protects the lender in the case of a default and not you, the borrower.
How does a medical specialist home loan help?
Getting your degree, whether you’re a doctor, dentist, vet, or other medical professional is a long and expensive journey. You may have also taken out educational or professional loans to support your journey, which are essential considerations when taking out a home loan. That being said – if you have a stable job with adequate disposable income, you may consider climbing the property ladder early in your career with a specialist home loan for medical professionals.
Some lenders may allow you to borrow up to 100 per cent of your property’s value under medical specialist home loans, which reduces the deposit amount you need before purchasing the property.
Suppose you’re eyeing a residential property worth $700,000. In that case, you may be able to borrow up to $630,000 with a 10 per cent deposit of $70,000 from a range of lenders in Australia that offer home loans for medical professionals. A lower deposit is especially helpful when you’re juggling several loan repayments – say for your education or car loan, and your monthly income can support your future home loan repayments but not a lump sum amount like a hefty upfront deposit.
What is an Offset Account?
An offset account is a savings or transaction account linked to your home loan. The money that you deposit in this account is offset against the principal of your home loan and used to lower the interest charged.
Why do doctors get special deals on medical home loans?
When lenders hand out money to borrowers, they want to minimise their risk and, therefore, prefer borrowers in stable jobs that they see as having strong potential to repay their loan. Not surprisingly, lenders have a list of borrowers and occupations they see as lower risk, and doctors have always topped that list.
That’s because the incomes of medical professionals tend to increase with experience (which comes with time). Medical professionals are also considered unlikely to default on their loans by lenders.
If you’re a doctor or another type of medical professional, it is only fair that your hard work and dedication towards the welfare of others is rewarded by offering you specialist home loans that make it easier to climb the property ladder. You may also be eligible for benefits like the First Home Owners Grant in your state if you are buying your first home and meet your state’s eligibility criteria.
Whether you are looking for a first home loan or are looking to refinance your existing mortgage, it is always a good idea to look around and compare deals from multiple lenders that offer home loans for doctors and other medical professionals.
Which doctors are eligible for medical specialist home loans?
Doctors and certain other medical professionals can potentially save thousands on the cost of their home loan with LMI waivers. They may also be eligible for exclusive home loan interest rates and fee waivers that give them further savings on their loan.
Medical professionals that are generally eligible for medical specialist home loans include:
- Sports chiropractor
- Animal chiropractor
- Cosmetic Surgeon
- Dentist or dental specialist
- ENT specialist or surgeon
- General Practitioner (GP)
- General Surgeon
- Heart Doctor
- Heart Surgeon
- House Medical Officer (HMO/residency)
- Hospital-employed doctors
- Intern doctor (internship)
- Junior Medical Officer (JMO/residency)
- Maxillofacial Surgeon
- Medical Administrator
- Medical Practitioner
- Medical Registrar
- Oral and Maxillofacial Surgeon
- Oral Surgeon
- Orthopaedic Surgeon
- Paediatric Surgeon
- Radiation Oncologist
The list is comprehensive, but the medical professionals eligible for specialist home loans are not limited to those on this list. In general, specialist home loans for medical residents, interns, hospital-employed doctors and most other doctors and medical practitioners are available from various banks and other lenders. However, certain medical professionals, like psychologists and naturopaths, may not be eligible for a medical mortgage. It is, therefore, advisable to check your eligibility with the lender, a mortgage broker or expert to be sure about the options available to you.
You must also have a registration with a recognised medical association in Australia or New Zealand like the Australian Medical Council (AMC), Australian Dental Council (ADC) or Australian Veterinary Association, etc., to be eligible for medical home loans.
Can I buy an investment property with a medical mortgage?
Most lenders have stricter eligibility requirements for investment loans for doctors compared to owner-occupied home loans. Other eligibility requirements may differ from bank to bank but mostly include a consistent full-time work record, minimal liabilities (or additional loans) and clean credit history with no defaults.
What additional documents are required to apply for a medical home loan?
Along with the regular documentation required to support your home loan application, lenders will want proof of your employment as a medical practitioner to confirm your low-risk status before offering you a mortgage.
For this purpose, you may need to provide:
- A copy of your registration with the Medical Board of Australia, or an equivalent professional body
- A copy of your employment contract or payslips proving employment
- Proof of membership with a recognised medical association in Australia or New Zealand
You may also be required to show 5 per cent genuine savings towards your deposit by presenting your bank statement for the past three months.
The remaining deposit can be funded from various sources, such as your savings, gifts and the First Home Owners Grant if you are eligible for it.
If you are using gift money as part of your deposit, make sure you have documentation showing where it’s from, that it’s a gift and other supporting information the lender requests.
Do nurses qualify for a home loan for medical professionals?
Nurses don’t qualify for medico home loans, but they may be eligible for other deals as nurses are also considered low-risk borrowers by lenders. However, they’re not eligible for the same benefits as doctors owing to their generally lower-income.
Consider getting in touch with a mortgage broker or individual lenders to discuss your position and compare the home loan deals available to suit your personal requirements.