Home loans for nurses
Benefits of home loans for nurses
Because nurses are essential service providers, lenders consider nursing a low-risk career, financially speaking, which may entitle you to certain home loan benefits.
Pay no LMI
Some lenders will allow nurses to apply for a mortgage with a low deposit and pay no LMI.
Lenders may consider a nurses's overtime income, fringe benefits and second-job income when assessing their home loan application.
Lower interest rates & discounted fees
Nurses may be eligible for discounted rates, plus extra support and other benefits.
What to look for in home loans for nurses
As a nurse, you may not qualify for the home loan discounts that are available to doctors. However, lenders consider nursing a low-risk career, financially speaking, which may entitle you to other benefits. These could include waived Lenders Mortgage Insurance (LMI), discounted interest rates, or waived annual fees.
Different lenders offer various home mortgage programs for nurses, and applying with the right lender is essential for maximum benefits.
Pay no LMI
It’s possible for Australians to borrow anywhere from 80 per cent to 105 per cent of a property’s value to buy a home. But if you have a deposit of less than 20 per cent of a property’s value, you’ll typically have to pay for Lenders Mortgage Insurance (LMI). The higher your Loan to Value Ratio (LVR), the more you may need to pay in LMI.
However, some lenders will allow nurses to apply for a mortgage with a deposit of 15 per cent (85 per cent LVR) and pay no LMI. Selected lenders may also offer other LMI discounts to nurses.
Another way to avoid LMI is to apply with the help of guarantor. This is a close relative who agrees to guarantee your loan with the value of their own home equity. With a guarantor’s help, you may be able to borrow as much as 105 per cent of a property’s value and pay no LMI, though it’s important that everyone knows the risks and responsibilities involved before signing on the dotted line.
Some lenders may only consider between 50 per cent and 80 per cent of a borrower’s overtime income when assessing a home loan application, which can reduce your borrowing capacity.
However, because nurses are essential service providers, lenders may consider 100 per cent of their overtime income when they apply for a nurse mortgage loan program.
You may have to provide lenders with an employment letter that confirms regular overtime income for the last one or two years, plus your most recent group certificate, and your last two payslips.
As a nurse, you may receive some component of your earnings as fringe benefits. Extra allowances may be credited to your bank account, or directly deducted from your pay to help pay for a car loan or a mortgage.
Some lenders don’t include fringe benefits when calculating borrowing capacity, which could affect how much you can borrow as a nurse. You may want to look for a bank or mortgage lender that counts fringe benefits as tax-free income, which could help to improve your eligibility.
Several lenders are aware that you may be working two jobs to supplement your income. However, the second job must be in a similar line of work to make it acceptable for a mortgage application, and some lenders may only count 50 to 80 per cent of this income towards your application.
Lenders that offer a home loan grant for nurses may consider 100% of your income from your second job (such as working shifts at a different hospital or medical centre) if you can show that you have six months to one year of employment history with regular earnings. If you have a clear credit history and are financially strong, lenders may also accept three months of employment history.
Home loan discounts available for nurses
Programs for nurses to buy a house may allow you to benefit from home loan interest rate discounts if you borrow more than $250,000. The more you borrow, the greater the potential discount you could receive.
Some professional packages for nurses could also provide other benefits, such as further interest rate discounts and waived fees.
First-home buyer discounts
If you’re a first home buyer as well as a nurse, you may be eligible for your state or territory’s first home owner grant (FHOG). Check with your local government for details of the grant’s eligibility criteria.
Some lenders may also offer extra benefits to nurses buying their first home, such as discounted LMI premiums. These offers may have their own requirements, such as borrowing less than a maximum amount and paying the deposit from your own savings.