A Guide to Home Loans for Medical Professionals

When it comes to mortgages, doctors and medical professionals enjoy a number of benefits that most Australians are not entitled to.

Why is this the case? If you work as a medical professional, financial institutions are inclined to view you as a low-risk borrower. This is because you perform an essential service that is well compensated relative to other jobs. Together, these factors mean you are considered a ‘safe’ borrower who is unlikely to default on their loan.

In this article, we explore the benefits of home loans for medical professionals and outline the criteria you’ll need to meet to be eligible.

The Benefits of Home Loans for Doctors and Medical Professionals

You Are Likely Exempt from Lenders Mortgage Insurance

Lenders Mortgage Insurance, or LMI, is paid by most Australians if their deposit is less than 20% of the property’s purchase price. It is supposed to protect the lender if the borrower defaults on their loan.

Depending on the cost of your property and the size of your deposit, LMI can add thousands or even tens of thousands of dollars to your home loan repayments. Luckily, medical professionals are generally exempt from paying LMI because of their low-risk borrowing status, even if their deposit is under 20% of the property’s price.

This means you can afford a larger loan with a lower deposit.

You Can Negotiate Better Interest Rates and Lower Fees

Though they won’t advertise it, most lenders are very willing to consider a lower interest rate for medical professionals because of their high earning potential and reliable employment status. The size of this potential discount will usually increase relative to the size of your loan. A fraction of a percentage difference in your interest rate can lead to savings of tens of thousands of dollars over the course of your mortgage, so it’s definitely worth negotiating with your lender.

This is where a financial advisor who understands your industry is invaluable. Smith Coffey specialises in helping medical professionals get the best deal on their mortgage. We’ll advocate for you and negotiate with lenders on your behalf to secure the best possible outcome.

You may also find that lenders are willing to waive your services or application fee upon request because of your profession. This usually only amounts to a few hundred dollars but is still worth investigating.

A Lower Deposit Is Required

In addition to avoiding the LMI, doctors and medical professionals tend to enjoy less stringent requirements around deposit amounts. While a deposit of at least 20%, also expressed as a loan-to-value ratio (LVR) of 80%, is the norm for most Australians, medical professionals may be able to obtain a mortgage with a deposit as low as 5-10% of the property value, all without paying LMI.

These more relaxed deposit requirements reduce barriers for medical professionals hoping to enter the property market. The end result could be that you’re able to purchase your dream home years earlier than would have otherwise been possible.

Who Is Entitled to Home Loans for Medical Professionals?

There are two factors that will determine whether you’re eligible.

The first is your specific profession. A wide range of medical professionals are considered eligible for the home loan benefits described in this article, including:

• GPs
• Surgeons
• Dentists
• Pharmacists
• Veterinarians
• Optometrists
• Anaesthesiologists

The second factor is your membership with a relevant approved association. These include but are not limited to:

• The Australian Medical Association
• The Australian Dental Association
• The Australian Veterinary Association
• The Australian Association of Practise Practice Managers

Final Thoughts

Under Australia’s mortgage system, doctors and medical professionals benefit greatly.

At Smith Coffey, we’re experts in providing financial and mortgage advice to Australia’s doctors and medical professionals so you can enjoy these benefits. We work with you to ensure you submit the strongest possible loan application and negotiate on your behalf to get you the best deal on your mortgage.

Want to have a free, zero-obligation chat with one of our team members about financing your dream home? Get in touch today.