Home Loan for Doctors | + Applying for a mortgage as health professionals
Are you a medical doctor, dentist or allied health professional looking to buy a property in regional and rural Australia?
Country towns love to welcome medical doctors into their communities.
For doctors, moving to regional Australia presents a unique opportunity to advance their skills and to experience a different lifestyle. But there’s more, although not unique to rural health professionals, rural mortgage for doctors can be very attractive.
Whether it’s your first home, investment property or hobby farm; medical doctors and some other health professionals are perceived by lenders as low-risk clients which often translates to lower interest rates and a loan value ratio (LVR) that can go up to 95% of the property value without attracting lenders mortgage insurance (LMI).
Regional Rural Finance Brokers has helped hundreds of doctors to secure competitive loans – often with a minimal deposit.
Why Are Home Loans for Doctors Different?
Doctors are considered highly desirable mortgage clients for banks and lenders because they are seen as:
- Earning higher than average base-salaries
- Earning higher than average non-base salaries such as penalty rates and allowances
- Having stable employment
- Low-default rates
- Borrowing larger than average amounts of money
A combination of these factors contributes to doctors being treated as a ‘special category’ of borrowers.
If you are a doctor looking to purchase a property, Regional Rural Finance Brokers will be delighted to help you look into mortgage options. Whether this is your first home, a renovation, a relocation, a hobby farm or an investment property, there is no doubt doctors can enjoy a better deal compared to others.
Who Is Eligible for a Doctors Home Loan?
As usual for home loans, different lenders can have different assessment processes and criteria. However, in general, for a medical professional to be eligible for a doctors home loan, they are often expected to demonstrate:
- Australian citizenship or permanent residency
- Good credit score
- Stable income for the past 2-3 years
- Be past any probationary period
Other health professionals such as dentists, pharmacists, and allied health professionals are also eligible for home loans for health professionals.
What are the main benefits of a home loan for doctors?
As mentioned earlier, medical professionals are highly desirable mortgage clients are they can enjoy an excellent reputation with banks due to their very low default rates. In practical terms, there are three main benefits for doctors applying for a home loan, including:
LMI waived for doctors home loan
Lenders’ Mortgage Insurance or LMI is often a requirement for those who cannot put an upfront deposit of 20% towards the property value they are purchasing. LMI can cost tens of thousands of dollars. That means most home buyers will limit their budget to a property they can afford to put a 20% deposit or they will have to spend money on insurance.
Doctors often have that fee waived when signing up for a home loan.
More competitive interest rates on doctors home loan
As low-risk borrowers, doctors can often enjoy lower interest rates. There are few reasons for that. Firstly, low default translates into lower rates as the risk-factor is one of the determinants of how interest fees are structured. Secondly, banks are in fierce competition among themselves and as highly desirable clients, doctors have banks fighting to attract them to sign up for a mortgage.
Income assessment for doctors vs other jobs
A lot of doctors have a different salary or industry award structure where there is a significant non-base wage component. These are things such as penalty rates, professional development allowance, shift work rates, overtime and after-hours rate increase, etc.
While workers in other industries may have similar things, they may not count in full (100%) for the purposes of income assessment.
With doctors enjoying that full recognition of their non-base salary, their income is often much higher than average.
Frequently Asked Questions
Are other Health Professionals Eligible for a Special Loan?
Yes! Health professionals such as pharmacists, physiotherapists, and optometrists are some of the professionals that enjoy an excellent reputation with banks and can often enjoy better loan structures and rates.
What is LMI (Lenders Mortgage Insurance)?
Lenders Mortgage Insurance or LMI is an insurance that protects the lender in case the borrower cannot meet their mortgage repayments. Typically, this insurance is a one-off payment at the time of settlement. LMI often becomes a requirement when the value of the loan is over 80% of the total property value. Doctors and other medical professionals can have this insurance fee waived when borrowing over 80% of the property value.
Is there a shortage of doctors in regional and rural Australia?
The short answer is yes! With such shortages, there are often great opportunities for health professionals in country hospitals, aged care facilities, community health and private practices. Check out this video about being a doctor in the ‘bush’.