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Mortgage Advice For Doctors And Medical Professionals
The Unique challenges of being a doctor
Although doctors and similar medical professions are generally well-paid roles, the mortgage application process is not as straightforward as you may think, due to some of the unique challenges involved with being a doctor.
Complex employment types can make it difficult for lenders to establish a clear pattern for your earnings. Just one example of this is that you might be a GP who works for the NHS, but also provides locum services privately. Self-Employed, trainee and locum positions, as well as short term contractees and secondees, are also viewed as less stable earners than traditionally employed doctors.
Higher than average student debts also have the potential to affect both your affordability criteria and credit score, which lenders will look as a part of your application.
Can these challenges be balanced against the longer term earning potential of a doctor?
Whilst there are challenges to buying a property, overall, doctors overcome them very easily. Lenders see a doctor as a stable career choice and will therefore consider your longer term stability and earning potential, when assessing your application.
Newly qualified doctors
Most applicants, regardless of profession, have to prove they’ve completed a minimum employment term, before lenders will consider their mortgage application. Doctors will not usually need to meet this criteria, in fact if you’re currently in paid employment or are starting paid work within six months, your application will be considered.
Trainee and junior doctors
Those in a trainee or junior doctor role can usually take advantage of the fact that most lenders are willing to base loan affordability calculations on your fully qualified salary.
Self-Employed doctor or medical professional
As a Self-Employed doctor, you won’t be subjected to the same lending criteria as other applicants. Usually one year of accounts will be acceptable, with some lenders, accepting even less, as opposed to at least three years worth of accounts required from other applicants.
Doctors who work exclusively in a locum capacity won’t usually be afforded the same mortgage benefits as other doctors, however, so long as you’re able to provide a stable work history, you should manage to obtain a mortgage offer.
Specialist mortgage lenders use an average income from recent months or years of locum work in order to calculate your affordability for a mortgage.
How do doctors prove their income?
As an innately trusted profession, doctors usually experience greater leniency from lenders with regards to providing proof of income. The type of proof needed is dependent on your employment type and our brokers will explain this to you based on your own individual circumstances.
How much can doctors borrow?
Being a doctor in itself will not directly affect your borrowing, however, a higher income level and stable position can lead to mortgage lenders offering you a higher multiple of your annual income. A typical borrower can expect to borrow around four times their annual income, but obtaining an offer up to six times your annual income is possible from some lenders. Your credit score will also impact the amount you can borrow.
Do I get mortgage discounts if I work for the NHS?
Whilst there are lenders who offer mortgage deals and discount rates to NHS staff, this usually only includes key workers, such as clinical staff. Doctors and other medical professionals within the NHS are not ordinarily offered NHS discounts.
Are there any home ownership schemes for doctors?
There are no home ownership schemes aimed specifically at doctors, although many of those intended for first time buyers may help doctors with less stable income streams.
Help to Buy scheme
With this scheme you can purchase a new-build property worth up to £250,000 (£450,000 in Greater London) with just 5% deposit. A government equity loan tops up this deposit, making a 75% loan to value mortgage accessible.
This scheme makes mortgages more accessible, as you only buy a percentage share of the property, meaning a significantly smaller deposit and repayments on your mortgage. Rent is payable on the remainder of the home.
Right to Buy
If you’re a local authority or housing association tenant, you may be able to purchase your home at a considerable reduction on market value, although there are regional variations in availability.
You can take a 95% NewBuy mortgage on a new build property, which has rates equivalent to just 75% of standard residential mortgage interest, with 5% deposit.
How can The Mortgage Company help?
As a doctor, mortgage applications can be complex, particularly if you have various employment types. Our mortgage brokers specialise in finding mortgages for doctors and medical professionals from those lenders who are most accommodating to your circumstances. We have access to a variety of mortgage rates from independent lenders which you are unlikely to find on the high street.
At The Mortgage Company, we understand that doctors are busy people and can take the administrative burden and stress out of applying for a mortgage. We also work around your schedule and availability to ensure we are available when you need us.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE