Doctor home loans: LMI waivers and deposit options

Eligible doctors may be able to buy with a 5% deposit plus costs and no lenders mortgage insurance (LMI). Other offers need about 10%. I'd check how the bank reads your medical income before choosing the smaller deposit.

Hospital overtime, locum work and a move into private practice can produce different borrowing amounts, even with the same savings. Your registration and the property also affect which waiver fits. We can compare the deposit and repayments with the cash you'll need for moving, tax and the months ahead.

Our LMI waivers guide explains the wider options. Use the LMI calculator for an initial premium estimate.

For this example, you have $150k saved and are buying a $1m home that the bank also values at $1m. I've allowed $25k for buying costs and assumed any LMI is paid upfront. Your actual duty, fees and concessions may be different.

The calculator estimate is $18,900 on this $1m purchase and $900k base loan, rounded to $19k in the cards. With the $25k cost allowance, the waiver leaves $25k from your $150k savings; paying the estimated premium upfront leaves $6,100.

If the lender lets you add LMI to the loan instead, you keep that cash but pay interest on the extra debt. I'd compare that with the waiver loan's rate, fees and repayments.

The 95% option leaves $50k more cash than the 90% waiver and adds $50k to the loan. I'd compare those repayments and the cash left after buying costs before choosing the smaller deposit.

If the bank values the $1m home at $980k, 95% covers $931k and you need $69k towards the price. At 90%, the loan is $882k and your contribution is $118k. Buying costs are extra in both cases.

For an 89.99% offer, you'll need slightly more than 10% towards the price. The loan-to-value ratio (LVR) is the loan divided by the property value the lender accepts.

Your payslip may include overtime and on call allowances, or your earnings may come from locum contracts and several clinics. A lender may use that income in full, average it or use a smaller amount. We can compare those figures before choosing the waiver with the smallest deposit.

Suppose your base salary is $140k and you receive $30k of regular overtime. Using 80% of the overtime gives $164k of annual income for the loan calculation. Using all of it gives $170k.

That's another $6k of income in the calculation. We'd run both figures with your expenses, HELP repayments and other debts to see what it changes for your buying budget.

Send us recent payslips and your employment contract, with the history of overtime and allowances. If a promotion, hospital rotation or new contract changes your pay, include the amount and start date in writing. The lender may also need an income statement.

For locum or contract work, include current agreements and records showing ongoing earnings. Moving from employment to an ABN can change the documents needed even when you're doing the same medical work.

You may still qualify for a waiver after moving into private practice. I'd look at your earlier hospital work alongside the new business, then compare which income records a lender can use. Our self employed home loan guide explains the broader options.

Depending on the option, the records may include tax returns, tax assessments, company financials, business activity statements or an accountant's letter. Some of the lenders compared below may consider 1 year of tax returns after at least 1 completed financial year in business.

These 2 cases show why I'd include your medical work history when we look at a new practice. The available business records and the individual lender decision mattered in each application.

Your HECS balance and repayments can also change the borrowing amount. If you're running a practice, our self employed guide covers the income records in more detail.

GPs, hospital doctors, interns, residents, registrars and recognised medical specialists may qualify. I'd check your registration and income before choosing a deposit option.

Your Ahpra register entry can change the available loans, especially during internship or if you trained overseas. Include any conditions on your registration and your residency details.

The Medical Board's registration types are summarised below. If your status is changing soon, tell us when. Some lenders need the new registration in place before they can use it.

You don't need Australian Medical Association membership for every offer. Professional membership requirements vary, so we'll check the loan you've chosen. Your credit history, income, property, deposit, repayments and any lending limits also matter.

We work with more lenders than the examples below. I'd start with the offers that fit your registration and income, then compare the deposit, repayments and fees. A higher borrowing percentage can still leave you with a loan that's too large for your budget.

If you're considering BOQ Specialist, we'd first need to check whether it accepts new applications through us before including it in your loan comparison.

A variable loan can give you an offset account and flexible extra repayments, with a rate that can change. A fixed loan gives repayment certainty for the fixed period, with limits on extra repayments and possible costs if you repay, refinance or change it early. A split loan combines both.

Construction commonly uses a variable rate while the lender makes progress payments. Fixed or split options may become available once the build finishes.

An offset account reduces the balance used to calculate interest while keeping your cash accessible. That can help when you're setting aside tax or managing irregular practice income. Compare whether the offset is 100%, the number of accounts and any account or package fees.

Extra repayments can reduce interest and shorten the loan. Variable loans commonly allow them; fixed loans can have limits and costs for paying out early.

Interest only repayments can reduce the initial payment while the loan balance stays the same unless you pay extra. Repayments rise when you start paying down the principal, and you'll usually pay more interest over the full term.

I'd check the purpose, loan percentage and length of that period before building it into your budget. Construction, company or trust ownership and family guarantees have separate restrictions in the lender comparison.

Some doctor waivers cover an investment purchase. We need to compare the rent the bank may use, existing debts, repayment type and any equity you want to release. Your own home and an investment can have different deposit requirements.

For company or trust ownership, check the proposed borrowing alongside your accountant's and solicitor's advice.

Practice goodwill, equipment, fit out and working capital need separate business finance. Buying the premises may need commercial finance. Your residential LMI waiver covers the home loan.

Practice debts can also reduce what you can borrow for a home. I'd plan the applications together so you know what the business commitment leaves available for your purchase.

If you qualify for both, we can compare a doctor waiver with the Australian Government 5% Deposit Scheme. Our low deposit home loan guide explains the broader choices.

The scheme has no income caps or fixed annual place limit. Buyer eligibility, local property price limits, occupancy and participating lender requirements still apply. Eligible single parents or legal guardians may qualify with a deposit as low as 2%, leaving up to 98% to borrow before costs.

A family guarantor loan uses some of a family member's property to support your borrowing. Their property is at risk if the guarantee is called on. We'd compare the amount guaranteed and a plan to release it, along with the cash needed and repayments you can afford.

A guarantee and a medical waiver won't always work together. The comparison table lists the lender restrictions to check before relying on both.

Tell us about hospital rotations, parental leave, a higher paid role or a practice purchase. A lender may consider documented return to work pay or a signed new contract, while checking the start date, savings and any income gap. If your registration means a waiver doesn't fit, we can compare a standard loan.

A home loan pre-approval can help set your budget while you search. If you're buying and selling at different times, compare bridging finance early so we can check whether the proposed loan structure fits.

In most standard residential matters, the lender pays us commission after settlement rather than you paying a separate broker fee. We disclose the commission and any fee that applies before you proceed.

Read how we review lenders for our approach to the comparisons.