Doctor Mortgage

Are there mortgages tailored to doctors?

Yes and no is the answer – it sounds like I’m sitting on the fence. The reason is that there are mortgages tailored to professionals, which very much apply as a doctor.

Professionals are looked on slightly differently from other workers as they gain higher incomes later on in their careers. They have more secure job positions and, because doctors obviously work in the NHS and are essentially government employees, that offers even greater security.

So there are products out there tailored towards professionals. Professional mortgages have certain stipulations and criteria, so they may not always be the best product for you, regardless of whether you’re a doctor or a lawyer or an architect.

Someone like myself can navigate you through the process to make sure we get you the right product. I won’t exclusively target professional mortgages when a doctor applies for one – I’ll give it the same consideration I give everything and make sure it’s a good match for you. That will depend on your individual circumstances and the type of property you’re looking for.

What are the unique challenges of being a doctor?

Things have changed a lot since I worked as a doctor, especially with the emergence of student loans to cover tuition fees. I think there’s a lot of anxiety amongst junior doctors on lower salaries about how they can buy a home with all this debt from university and training.

Like everything, the devil’s in the detail. To be eligible to repay your student loans you have to be earning a certain salary, so depending on the circumstances you may not have to repay the loan yet. In that case, the lender doesn’t need to worry about it affecting affordability.

Also, lenders don’t tend to look at the overall size of the loan, they look at your monthly repayments. You could well have a situation where one applicant has a bigger loan than another, but is actually paying less in his monthly commitments. So student loans don’t preclude you from getting a mortgage – it will depend on how much you’re paying per month.

Another concern for doctors is that you often have to move around for training. I myself moved six times in seven years. Having a lot of addresses on your history can affect your credit rating. Again, that’s where someone like myself can be quite valuable – just presenting this to a lender the right way can make all the difference.

A further challenge is that training in the NHS is often on one-year contracts. That’s something that certain lenders are aware of. My job is to target lenders and present the information in a positive way.

Are there advantages for doctors with property and mortgages?

As well as challenges there are also advantages. Doctors have a more secure job and a high earning potential. They’re regarded as professional and also as key workers, which gives you special status. There are schemes enabling key workers to access exclusive housing opportunities.

Some of those schemes are only on new build homes, but there is one that allows you to buy the house that you’re in through shared ownership, which again favours key workers.

So even though there are challenges with being a doctor there are advantages as well. As your circumstances change over time, different schemes will be applicable. It helps to have someone to navigate the various schemes to find the best one for you. So don’t be worried about the challenges and don’t let them stop you looking for the house that you want.

How relevant is the longer term earning potential of a doctor?

The first couple of years as a junior doctor are quite challenging – you’re working long hours under quite a lot of stress. Sometimes you’re doing jobs just because you need broad experience as a doctor before you specialise.

You’re also moving around a lot, which doesn’t suit everybody – there are challenges for relationships, for example. But the big payoff of course is that once you get to a certain level of experience, you will earn a lot more money.

The vast majority of doctors are in it to help people, but they also want to obviously have a reasonable standard of living. That’s perfectly fair and understandable. In the medical world it’s accepted that you will earn good money later on – and that’s not just true with doctors, it’s true for lawyers and a lot of other professions as well.

This is why professional mortgages exist and potentially allow you to borrow more. But you may have to pay more interest for that. So let a broker find the right option for you.

How do you prove income if you are a doctor?

Doctors generally have payslips like everybody else. The big advantage is that it’s from one employer which means it’s a standardised payslip. With a million people working in the NHS, lenders are very familiar with those payslips.

There are complexities to doctors’ pay, though – particularly when you’re starting off, and you may need to supplement your income in other ways. Often junior doctors get extra work within the NHS via an internal overtime mechanism called the bank.

You can take bank shifts on top of your normal responsibilities as a doctor. Some lenders will give you 100% credit for any overtime you do, while others will take 50% of it. So if you’re doing a lot of bank shifts, you potentially have access to a bigger mortgage with some lenders.

The other option is to do locum work through an agency, which offers even better pay than the bank. This can become complex – using a small agency you may have to work through an umbrella company. For a mortgage, you need someone who’s familiar with decoding umbrella payslips and presenting the data to the lender. That way you will gain full credit for what you’re doing.

How much can I borrow as a doctor?

This is very important because houses are expensive. Different lenders apply a ‘multiplier’ to the value of your salary to calculate your loan. Lending multiples at the moment are somewhere between 4.5 to 5 times salary. Professional products will allow you to borrow slightly more but may involve higher interest rates.

Five times your salary should open the doors to a lot of housing – plus doctors can supplement their income as discussed earlier. So you may be entitled to a bigger loan than you originally thought. There’s definitely scope to find the right mortgage for your money.

What else should we consider around doctor mortgages?

We’ve touched on the number of schemes available for key workers and I’d like to reassure you so that when you look at property websites you’re not deterred from buying a house.
You might not get a special NHS mortgage or a discount as a doctor, but there are other ways of getting special dispensation. There are lots of ways that a mortgage broker can boost your income and allow you to borrow more than you originally thought.

Having tried to buy a property myself working as a junior doctor, I recognise the challenges. Even making phone calls can be difficult – you have very little time and there are areas where you just can’t make calls – such as intensive care where I used to work. You can’t get a mobile signal or find a private space to make a call, and it’s challenging to access a computer. You’re probably under a lot of stress which isn’t a great time to be making big decisions.

I decided not to go with a mortgage broker when buying my first place and I regretted it for those reasons. There was also a lot that I just didn’t understand. I thought it would be a much more straightforward process to find a mortgage than it was. I found it extremely challenging. Finding the right lawyer was also difficult. That’s a service that CS Mortgage Solutions provides. We have a list of great conveyancers that we work with.

We can also negotiate with estate agents for you. When I was buying my first home I had no experience and I ended up paying way too much. So there are many reasons why coming to a broker can help. We offer a complete service right through to when you get the keys – and it can be a long process even if things go smoothly. There are always problems along the way due to the complexities of English law – so let us take the strain for you.

Your home may be repossessed if you do not keep up with your mortgage repayments.