Are there mortgages tailored to doctors?
There isn’t a specific mortgage just for doctors, although you can get professional mortgages which cover doctors, vets, solicitors, accountants… anybody in a professional role.
It could be that you are newly qualified and your income is going to increase over time – and we do have lenders who have identified a need for these types of mortgages. They might offer special features, such as zero product fees for setting up the mortgage, or they won’t charge any valuation fees.
They may also calculate your income slightly differently. So there are specific products for professional people and doctors would certainly be included in those.
What are the unique challenges for doctors in getting a mortgage?
The first is that you’re going to start on a lower salary while you qualify. As you get more experienced your salary is going to increase. That can be a bit of a challenge for a junior doctor starting off in their career.
You may want a mortgage but at that point you might not be able to borrow enough to buy a property. It may be the case that we need to look at a lender who’s going to take your future income into account.
Doctors study very hard for their qualifications and it takes a long time – and there’s a cost to that. Student debt is high among doctors, which can also be a challenge. However, some lenders potentially might disregard your student loan. Others will look at it as part of how they assess your affordability. So it’s just a case of having a broker looking at the affordability and seeing how to get you the most suitable deal.
Newly qualified doctors may just be going into a role, and in that case you won’t have the proof of income that lenders will be looking for – the standard three months’ pay slips. Or you may be qualified and due a pay rise in the next few months, but again there’s no evidence of that in your payslips.
The good news is that some lenders will offer mortgages on a Day One basis. As long as you’ve got a letter to confirm your new income and you have a contract, those lenders don’t need payslips. They will take that letter or the contract and base affordability on that.
That’s a big thing to keep in mind when you’re looking at a mortgage as a doctor – any future changes to your income. As a doctor your income will change quite regularly as you become more qualified.
How can these things be balanced against the longer term earning potential of a doctor?
As your salary rises your borrowing potential is higher. Lenders recognise that doctors have a good income and will often accommodate you even ahead of your payrise, as we mentioned.
With professional mortgages, too, you may find that you can borrow a higher multiple of your salary than you might find on a standard mortgage product.
How do you prove income if you are a doctor?
Proving your income usually means providing three months’ payslips or evidence of a pending pay rise, or evidence of a contract. With overtime and things like that you might also need your P60 as well, to evidence that it’s a regular thing.
Somebody who just does overtime on a one off can’t use that additional money as part of their income, but if it is regular and can be backed up with payslips and P60s then the lender will accept that.
How much can you borrow if you are a doctor?
The benefit of professional mortgages is that you could potentially go up to six times your income, purely because you are a professional.
That amount wouldn’t be available to a standard person buying a house or remortgaging, so that’s a big benefit of having a professional mortgage – you can borrow more based on the job that you do.
Do I get mortgage discounts if I work for the NHS as a doctor?
Yes – and some housing developers also offer NHS discounts. It obviously would be a case of finding out which developers are doing it. But you would be eligible for that, as well as the rest of the products and schemes that are available to NHS workers.
With professional mortgages you might find there’s a lower rate of interest as well, which is a benefit. I do also reduce my advisor fee by £100 for any NHS worker. So there are discounts available – it’s all about finding who does them.
What else do we need to be aware of with Doctor mortgages?
We come to you for advice on health issues, and we suggest you do the same with us for mortgages. Mortgage Brokers are highly qualified. They know exactly where to place each client, which lenders are going to offer the best income multiples and which lenders accept the income types we’ve mentioned.
With the added complications of overtime and enhancements and things, I would always say speak to a broker. We’re the best people to place your mortgage with and we make the whole process much easier.
Your home may be repossessed if you do not keep up with your mortgage repayments.
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