Mortgages for Doctors - Finance for Medical Professionals
Mortgages for doctors are not as straightforward as you may not expect. Doctors and medical professionals face particular challenges when applying for a mortgage.
But with the help of a specialist broker, there are some highly favourable terms available to you.
We’ll show you how to maximise your borrowing power and speed up your mortgage approval whether you are a:
- Newly qualified or junior doctor
- Locum doctor
- Self-employed doctor
- Doctor with your own practice (director or LLP)
- Consultant or Surgeon
- Mixing it up between NHS and Private work
In this guide:
Can Doctors Get a Bigger Mortgage?
For many doctors, it's possible to get a bigger mortgage than the average person for a variety of reasons. Doctors are highly employable, meaning that if they were to lose their jobs, it is likely that they could find a job elsewhere quite easily. This level of job stability makes them a lower risk to lenders, and they may be likely to let doctors borrow more.
Furthermore, doctors have high earning potential once they are established in their careers, and even the fact that they have spent the best part of a decade studying for their qualifications could be an indicator that makes them a candidate for a larger loan.
What Types of Mortgages Can Doctors Get?
Doctors, like other highly-trained professionals, have various mortgage options available to them. Some UK lenders offer professional mortgages designed specifically for professionals such as doctors, dentists, and other high-earning individuals. These mortgages may feature benefits like higher loan-to-value ratios, lower interest rates, and flexible affordability assessments based on future income potential.
Typically, doctors can apply for standard residential and buy to let mortgage products, but depending on your experience and employment type, there could be some unique challenges along the way.
5 Reasons Doctors May Struggle to Get a Mortgage
1. The complex nature of your earnings
Medical professionals can often have complex income structures, which lenders typically shy away from.
You might have different income streams - usually a combination of NHS, locum work and private practice. And because of this more complicated income structure, lenders on the high street could decide you don't meet their criteria.
- Only a quarter of GPs and GP partners are salaried. GP principals contracted to the NHS pay for their sickness insurance, bear all partnership responsibilities, and can sell on their partnership share. They may have additional sessional earnings and pay for locum insurance.
- Sessional GPs working solely as locums can provide their services as sole traders or through their own limited companies.
- Consultants can earn from as many as five income streams: NHS salaries, merit awards, income from private practices, hospital board membership salaries, and payments for lecturing. Together, these earnings forecasts and expenses require lenders to be familiar with the industry.
2. You’re not necessarily buying a house to live in because you’re mobile on the job
Over the course of your early career, you may be expected to move hospitals, cities, and between deaneries every year until your mid-30s. You may want to invest in a property but need the flexibility to let out your home for a period. So, your mortgage lender will need to be willing to grant a buy-to-let mortgage.
Or you may decide to relocate permanently, buy a second property as your home, and convert your first mortgage to a buy-to-let mortgage.
3. You want to buy a UK property while working abroad
It's also common for doctors to work and own a property abroad, but there may come a time when they wish to buy a 2nd property as a base in the UK.
4. You're a newly self-employed doctor
- Many roles within the medical profession require you to go from being in a salaried job to becoming self-employed.
- As soon as you have 2-3 years of accounts/tax returns to submit, this may not be an issue, but many lenders will turn you down in the first few years because they want proof of ongoing stable income.
- Self-employed doctor mortgage applications are more likely to be processed without hiccups if you go through a specialist mortgage broker.
5. You're a junior doctor and need your future earnings to be considered, rather than your current earnings
- Newly qualified doctors can spend years working on job rotation with a variable income.
- While your earnings potential is set to rise as you progress, many high street lenders don't understand your job contracts or pay scale and will turn you down based on your current income.
- Many junior doctors think they aren't in a position to get onto the property ladder. But with the guidance of a specialist broker, your situation can be presented in a favourable light to lenders - making it possible for you to buy your first home.
The Benefits of a Specialist Mortgage Broker as a Doctor
- Specialist brokers understand that doctors can have a complex earning structure and how it should be presented for a mortgage application to be successful.
- Specialist mortgage brokers have experience arranging mortgages for medics.
- If you're a junior doctor with variable income and a complex employment contract, a specialist broker will know how to support you and choose the right lender.
- They can identify mortgage lenders who could offer you more flexible terms (such as being able to rent out your property if necessary).
- Using a broker could get you better rates and lower set-up costs than you could find yourself.
Finding a lender open to your income structure can be an unnecessary workload on top of an already busy schedule. A mortgage broker can streamline the application process and ensure you get the best deal for your circumstances.
Mortgage brokers also have valuable connections with private lenders, further widening your options and potentially allowing more flexibility in your application.
For more details, watch our video below on the benefits of using a specialist mortgage broker:
Are you a High Net Worth client? See our complete guide to HNW mortgages.
What's the Best Mortgage Rate a Doctor Can Get?
A minimum of 4.5 times income is available to most mortgage applicants. However, doctors are often able to borrow five times their income, and some lenders will be prepared to go higher than that for senior doctors and consultants - depending on the deposit size you can offer.
Working with a specialist mortgage broker can speed this process up and get you deals you might not otherwise have access to.
See similar: Can I get a mortgage for 5 or 6 times my salary?
Will My Credit Score Affect My Mortgage Application?
Yes, your credit score is an important part of your mortgage application and can affect what deals are available to you. When applying for a mortgage, your credit score will be crucial in the lender’s decision.
When checking your credit score, mortgage companies will be looking for:
- Your inclusion in the UK electoral roll with your current address
- Your bank and savings accounts and their balances
- In-store credit cards in your name and how much you owe on them
- Car lease agreements
- Whether you are "financially linked" with someone else (as a co-signatory on a mortgage or lease agreement, joint credit cards etc.). Shared rent doesn't count.
- Any missed payments
- Any CCJs (County Court Judgements for non-payment of debt) or home repossessions
- Student Debt
Student loans differ from other debt types and don’t appear on your credit rating.
Any outstanding student loan will only feature in a mortgage application if your lender asks for details of your repayment schedule as a marker of your ability to make repayments.
The total debt amount is not considered. And as student loan repayments are directly related to current earnings, doctors are no worse off applying for a mortgage than any other graduate.
Please read our blog on mortgages and credit scores: what you need to know.
How to Get a Mortgage as a Doctor
An experienced broker can put you in touch with the right lender for your circumstances and guide you through the application process. At Clifton Private Finance, we specialise in arranging mortgage finance on residential and buy to let property across the UK.
We have relationships with high street, private and specialist lenders and can offer access to the best rates on the market, as well as bespoke financial solutions.
If you have complex circumstances or want to get an accurate idea of the options available to you, we can help.
To see what we can do for you, call 0117 332 5096 or book a free consultation below.