Home loans for doctors: no LMI from a 5% deposit

An LMI waiver can give you a choice: buy sooner with a smaller deposit, or keep some savings available for moving, setting up your home or time away from work.

The saving is only part of the decision. We'd compare the interest rate, fees and repayments over the same loan term, so you can see whether the doctor offer is better value than a standard loan. If you've saved a larger deposit, you can still use it to reduce what you borrow.

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

Before joining Hunter Galloway, I worked in private and commercial banking. That background helps when we're explaining a move into private practice or income from several medical roles to a lender. Here's what we do with your application:

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 depend on the property and your eligibility.

Compare the repayments with the cash you'll need for moving, tax and the months ahead.

If the lender lets you add LMI to the loan, you keep that cash but pay interest on the extra debt. I'd compare the waiver loan and the standard loan using the same loan term and repayment type, including the rate, fees and LMI. That shows what each option costs you upfront and each month.

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.

There isn't one borrowing limit for doctors. It depends on your income, living costs and debts, including how the lender counts overtime and HECS repayments. Banks also look at your total debt compared with your annual income, called your debt-to-income ratio, and apply their lending limits.

Use our borrowing power calculator for a starting estimate. I'd then compare lenders using your actual income records before you set a buying budget.

Your payslip can include overtime and on call allowances, or your earnings can come from locum contracts and several clinics. How much the bank counts depends on its rules and your income history. It can use the full amount, an average or 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, HECS repayments and other debts to see what it changes for your buying budget.

Salary packaging can make your take-home pay look different from your contracted salary. Send the payslip breakdown and packaging statement, and the lease statement if you have a novated car lease. I'd separate salary, benefits, reimbursements and repayments before comparing lenders. A reimbursement mustn't be counted twice, and a payslip deduction isn't automatically extra income the bank can use. Loan and lease repayments still need to be included in your expenses.

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 can also ask for 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.

Locum shifts with a second health service can count, even when they are casual and interstate. See how one junior doctor's locum income was assessed.

Moving into private practice does not rule you out of a waiver. 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 can 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.

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 can qualify when their registration and income meet the lender's rules. Psychiatrists and dentists have their own guides: psychiatrist home loans and dentist home loans. 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.

Interns, residents and registrars may qualify, but your current registration matters. ANZ's medical waiver excludes provisional registration, while Westpac names hospital-employed interns in its doctor offer.

If you're starting hospital work, my home loans for interns and junior doctors guide covers registration, contracts and your first payslips.

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.

One of our clients, a principal house officer, was refused the waiver by one bank on her job title alone. Another bank approved the same file first time. Here's what happened and how to check your title.

Looking for another health profession? See our guides for nurses, midwives, physiotherapists, pharmacists, audiologists and veterinarians. Their lender options can differ from the doctor waivers below.

Intern or on provisional registration. I'd start with Westpac or St George. They name hospital-employed interns and set no minimum income. NAB is the backup. ANZ and Bankwest need general or specialist registration.

Salaried hospital doctor or GP buying a home with 5%. ANZ, NAB and Westpac reach 95%. CBA's Medico Plus+ reaches 94.99%, so you need 5.01% plus costs. So I'd choose on the rate and on how much of your overtime each one counts.

Moved into private practice in the last 2 years. CBA can use 1 year of financials for doctors with 12 months in the same field. Westpac can use 1 financial year of tax returns. Those are the 2 I'd compare first.

If your practice income moves around, I'd usually start with a variable loan and an offset account. You can park tax money in the offset and still pay less interest. Fixing gives you certainty but limits extra repayments. Interest-only rules are tighter than the headline deposit, so check the lender rows above before planning on it.

Some doctor waivers cover an investment purchase. We need to compare the rent the bank will count, 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 can require 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.

For most doctors, a waiver beats the 5% Deposit Scheme and a family guarantee, because it has no government scheme price cap and doesn't put a parent's home on the line. The scheme can still help if your registration doesn't fit a waiver. Our 5% Deposit Scheme guide and guarantor guide cover both.

A lender can consider documented return to work pay or a signed new contract after 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.

If your income includes overtime, locum work or practice profits, ask whether the lender has assessed those records or only given an estimate. Find out what it still needs before you rely on that borrowing amount to make an offer.

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

Send us recent payslips or your available practice figures, your deposit and price range. We'll compare the income each lender can use, repayments and the cash you'd have left after buying.

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Client examples are based on real situations. Names and identifying details have been changed.