Home loans for doctors

Doctors & other medical professionals are eligible for special discounts on their home loans. These discounts are quite significant, often resulting in savings of many thousands of dollars either when the loan is setup or over the term of the loan.

However, these discounts are not advertised to the general public, and are not offered by all lenders. So how can you find the lowest interest rate for your home loan? Read on to find out.

What discounts are available?

There are two main types of discounts offered to medical professionals:

• Lenders Mortgage Insurance Waiver – This is where the lender approves your loan for more than 80% of the property value, however waives the requirement for Lenders Mortgage Insurance (LMI). This is a once off saving when the loan is setup.
• Interest Rate Reduction – It isn’t hard to see how a lower interest rate will save you money. As a doctor you don’t need to borrow over $1 million to negotiate a better rate, you can request a discount on a much smaller loan size.

Although LMI discounts are not offered by as many banks as they used to, they are still available. Interest rate discounts are more common however the size of the discounts being offered for doctor home loans will differ quite significantly between the banks.

How do I know which lender will give the best discount?

Although to the general public interest rates are relatively stable, the banks actually have their cost of funds fluctuate on a daily basis. Because of this they in turn vary their special pricing strategy to make sure they do not give a discount that results in them making a loss on a loan.

In other words, the bank that will offer the best discount this week, may not be the bank that offers the best discount next week. Mortgage Brokers know which banks are pricing aggressively and which are likely to offer you the best discount. You may want to consider specialist mortgage brokers such as the Home Loan Experts, which regularly handle special pricing requests for doctors & other medical professionals.

Which types of doctors are eligible?

Each lender has their own way of classifying doctors into those that are eligible and those that are not. If you are a member of the Australian Medical Association (AMA) then you are likely to be eligible for a special discount.

Below are a list of medical professionals that are accepted by the banks for special discounts:

• Doctors of Medicine (eg Anaethetist, Dermatologist & Gynaecologists),
• Dentists,
• Physiotherapists,
• Radiologists,
• Osteopaths,
• Psychiatrists,
• Veterinarians (may require Australian Veterinary Association membership),
• Chiropractors,
• Optometrists,
• Surgeons,
• Radiographers (on a case by case basis) &
• Pharmacists (on a case by case basic).

Why do lenders offer discounts for doctors?

There are two main reasons that the banks offer special home loan pricing for doctors. Firstly because medical professionals tend to be a lower risk than people in other professions. Their employment is secure, they are highly intelligent & tend to be conservative with the way they manage their finances.

The second reason banks favour the medical industry is that many doctors eventually open their own practice. When they do open their own business then they may need a large commercial loan which can be quite profitable for the bank. Medical professionals are also likely to borrow more in the future to finance their family home or several investment properties.

How can I finds the best discount?

Mortgage Brokers know which banks have the best discounts for doctors. You may want to consider using a specialist mortgage broker such as the Home Loan Experts, which regularly handle special pricing requests for doctors & other medical professionals.