Home Loans for Doctors: Special Benefits You Should Know About

Landing your dream home can be tricky but as a doctor or medical professional, you're in a unique position. Many lenders view home loans for medical professionals as low-risk and offer fantastic benefits, including the possibility of an LMI waiver for doctors. Good job security and high income potential means that if you work in medicine, you might have access to tailored terms that make mortgages for doctors and other medical professionals much more accessible. Let’s take a look at what the key differences are and what specific benefits might be available if you are a doctor.

How Do Home Loans For Doctors and Other Medical Professionals Differ?

For banks and lenders, when it comes to home loans it’s all about how much risk a potential borrower poses. A lot of banks won’t even consider approving a home loan until you have at least one to two years of financial records available, particularly if you’re self-employed or a contractor.

However, unique mortgage borrowing arrangements exist for professionals and specialists such as medical professionals, nurses, lawyers, accountants and engineers. Lenders perceive these professionals as lower risk as they tend to be in the higher income brackets, have more financial stability and pose a lower risk of defaulting on their mortgage.

Lenders often offer better deals to medical professionals for three good reasons:

1. Job Security - Healthcare roles are generally recession-resistant and stable.

2. Low Default Rates - Historically, medical professionals tend to meet their repayments.

3. Growing Income Trajectory - Earnings generally increase as you advance your career.

As a result, lenders often reward doctors with:

• Lower deposit requirements

• LMI waivers

• Lower interest rates

• Higher borrowing capacity

Deposit Requirements on Mortgages For Doctors

Most borrowers are encouraged to save a deposit of 20% of the property’s value when looking for a home loan or risk paying Lenders Mortgage Insurance (LMI). Medical professionals, however, may be able to access home loans with lower deposit requirements than the standard 20%. Some lenders might allow borrowing with a deposit as low as 5%, avoiding the need to save a larger upfront sum.

What Is Lenders Mortgage Insurance?

Lenders Mortgage Insurance (LMI) is a one-off premium paid by the borrower when their deposit is less than 20% of the property value. It protects the lender (not you) in case you default on your mortgage.

LMI can often add thousands to your upfront purchase costs – making it a major barrier for buyers who haven’t saved a full 20% deposit.

What Is An LMI Waiver For Doctors?

The LMI waiver for doctors is a special exemption offered by many lenders to medical professionals who don't have a 20% home loan deposit. A lower mortgage deposit usually triggers Lenders Mortgage Insurance.

That's because a loan to value ratio of over 80% is generally considered a higher risk for lenders. However, professionals and specialists such as doctors, lawyers and accountants can sometimes benefit from unique loan agreements that reduce or waive the LMI fee altogether.

The discounts and terms vary by lender so it’s worth getting a mortgage broker involved to shop around for the right loan for your circumstances and to determine their eligibility for these specialist borrowing arrangements.

Which Medical Professionals Are Eligible For Tailored Mortgage Terms?

Eligibility depends on the lender, but most include:

• General Practitioners,

• Medical Specialists

• Surgeons

• Dentists

• Hospital-employed doctors (including interns, registrars)

• Optometrists

• Physiotherapists

• Chiropractors

• Pharmacists

• Veterinary Practitioners and more

You’ll need to provide proof of:

• Registration with a relevant industry body (e.g., with AHPRA, Australian Medical Association or equivalent)

• Have a stable income with proof of consistent earnings

• Have a good credit history

• Be buying a standard residential property

How Much Could Eligible Medical Professionals Save With an LMI Waiver?

Let’s take a look at the potential savings from the LMI waiver for doctors:

Note: LMI estimations based on Westpac’s calculator for a newly built property in Queensland. Each lender may calculate LMI differently.

Do Home Loans For Doctors Come With Any Other Benefits?

There are a number of other potential benefits and opportunities available to medical professionals and doctors due to their perceived ‘low risk’ status with banks and lenders. These include:

Discounted Interest Rates and Fees For Doctors

Given that banks generally view doctors as good borrowers and attractive customers, some lenders may offer discounted interest rates to medical professionals and waive loan fees such as the application fee or services fee. These discounted rates are not advertised but can sometimes be negotiated. This discount could result in significant cost savings over the life of the loan.

Again, it is worthwhile working with a mortgage broker who already has relationships with the lenders and understands the products available to be able to negotiate and take advantage of the discounts and waivers that may be available.

Higher Loan Amounts for Medical Professionals

Doctors might be eligible for higher loan amounts compared to other borrowers, especially if they have a high income and good credit history. This can be beneficial for purchasing more expensive properties or securing financing for other purposes.

Government Schemes & Grants

You may also be entitled to apply for relevant state and federal Government grants and schemes which include:

• First Home Owner Grant (FHOG) – Available for first-time buyers purchasing a newly built home.

• First Home Guarantee (FHG) – Allows eligible first-home buyers to purchase with only a 5% deposit without LMI.

• Stamp Duty Concessions – Stamp duty exemptions are available in some states for first-time buyers.

Flexible Loan Terms & Features

You may also be able to access more flexible loan terms and features including:

• Access to offset accounts, redraw facilities, and extra repayment options.

• Some lenders may offer interest-only repayment periods for investment properties.

However, keep in mind that specific loan offerings and benefits change frequently, particularly in the current economic environment. It's essential to consult with a mortgage broker or financial institution for the most up-to-date information.

It's also important to note that these benefits are not universally available from all lenders, and eligibility criteria may apply. Different lenders might have varying terms and conditions for their professional home loan packages. Additionally, specific benefits can change over time due to market conditions and lender policies.

FAQs About Home Loans for Doctors

What is the LMI waiver for doctors?

It’s when lenders allow eligible medical professionals to borrow up to 95% of a property’s value without paying Lenders Mortgage Insurance.

Which medical professionals qualify for tailored mortgages for doctors?

Doctors, medical specialists, surgeons, dentists, hospital-employed doctors, optometrists, pharmacists, physiotherapists, chiropractors and veterinary practitioners may qualify depending on the lender.

How much deposit do I need to avoid LMI?

An LMI waiver may be applied for medical professionals who have a 5-10% deposit to secure a home loan.

Do I get interest rate discounts as a doctor?

Yes - many lenders offer reduced interest rates and quick processing tailored for medical professionals.

Can locum or junior doctors access these benefits?

Yes. Lenders often accept locum or hospital-employed doctors in training, provided you can supply registration and income documentation.

Why Work With CJG Finance to Obtain Home Loans For Doctors?

We specialise in helping doctors and medical professionals like you navigate the home loan process. Whether you’re a first-time buyer or refinancing your existing mortgage, we can:

• Access lenders who offer the LMI waiver for doctors

• Compare multiple lenders to find the best mortgages for medical professionals

• Handle the paperwork and simplify the process

• We make securing your dream home easier, faster, and more affordable.

If you’re a medical professional and you’re looking to secure a mortgage, speak to the home loan specialist at CJG Finance. We’ll help you find the most suitable lenders and loan options for your specific circumstances.

The information contained in this post is for general guidance only and does not constitute personal advice. It's important to do your own research as regulations, fees and charges change over time.

To take advantage of these potential benefits, medical professionals should consider contacting multiple lenders or working with a mortgage broker who specializes in catering to professionals in the medical industry. They can help identify the most suitable loan options based on individual circumstances and financial goals.

To find out more, contact us or call Colin at CJG Finance on: 0402 413 917 or email him: cgreen@cjgfinance.com.au