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Mortgages for Junior Doctors
Being a doctor is a respected and lucrative career, and you would assume it would be straightforward to secure a mortgage while working in this sector. However, there can be challenges, especially for those starting out in their medical career. This guide explains everything you need to know about securing a mortgage for junior doctors.
Strive secures residential mortgages for doctors, surgeons, consultants, and other healthcare professionals. We work with NHS trusts across the country to provide mortgages for NHS staff and offer access to a wide range of mortgage deals through our network of specialist mortgage brokers.
Types of Junior Doctor Contracts
Understanding your contract type is essential for understanding your mortgage options with mortgage lenders, as it impacts income stability and borrowing potential. Here are the main types of junior doctor contracts, we’ll break these down in more detail throughout the guide.
- Foundation Training (FY1 and FY2): These initial two years involve rotations in various specialities to gain broad experience.
- Core Training: This stage, lasting two to three years, focuses on specific areas like Core Medical Training (CMT) or Core Surgical Training (CST).
- Speciality Training: Following core training, this phase can last five to eight years, leading to becoming a consultant in a chosen speciality.
- Fixed-Term Contracts: These temporary contracts vary in length and cover specific roles or projects within the NHS.
- Locum Contracts: Locum doctors take on temporary positions to address short-term staffing needs, offering flexible schedules.
- Academic Training: Combining clinical work with research or teaching, these roles include both medical and academic responsibilities. Medical students may be eligible for bursaries to help fund some of the costs of their training, which can support future mortgage planning.
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Fixed-Term Contracts for Doctors and Mortgages
Doctors on fixed-term contracts may face additional scrutiny from mortgage lenders. Some may insist on having a minimum amount of time left on the contract or require evidence of experience from previous contracts, as well as confirmation that the current contract will be extended. However, certain lenders are more favourable and understand the nuances of junior doctor contracts, offering more flexible mortgage options. Working with a specialist broker who appreciates the specific conditions of the medical profession can significantly improve your chances of mortgage approval.
Mortgages for Locum Doctors
Locum doctors enjoy flexibility in their working hours, but some mortgage providers may view this as unstable employment. Most high street lenders prefer to see at least 12 months of locum income history and will take an average of the last three months’ earnings. However, some specialist lenders are more flexible and may consider mortgage applications with only three months of locum income, recognising the high demand and earning potential in the medical field.
Non-Guaranteed Income for Junior Doctors
Junior doctors often rely on non-guaranteed income sources such as shift pay, locum work, bank work, and overtime. Lenders typically assess these incomes by averaging them over 3, 6, or 12 months. Some lenders will consider the full amount of this income, while others may only take 50-60% into account.
Choosing the right independent mortgage adviser and understanding their lending criteria can make a significant difference in the amount you can borrow. Working with a specialist mortgage broker who understands these nuances can help you find a lender that will maximise your borrowing potential based on your total income.
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What is the Minimum Deposit Needed?
The minimum deposit required for mortgages for junior doctors is typically 5% of the property’s purchase price, depending on your financial health, affordability, and the lender’s criteria. However, a higher deposit can lead to better interest rates and a stronger future mortgage deal. By providing a higher deposit, you reduce the lender’s risk, which can lead to access to more favourable mortgage products.
Saving for just the deposit is important, but many junior doctors find that putting down a higher deposit not only increases their borrowing potential but also saves money over the lifetime of the mortgage through better mortgage rates.
Minimum Employment History for Junior Doctor Mortgages
The requirement for length of time in employment varies among mortgage lenders. Some require 3 to 6 months of continuous employment, while others may consider applicants after just 1 month of employment. Additionally, some lenders accept forward-dated contracts starting within the next three months.
This flexibility is particularly beneficial for newly qualified junior doctors transitioning into new roles or those signing fixed-term contracts with NHS trusts or private practices.
Professional Mortgages for Newly Qualified Doctors
Once qualified, doctors can access professional mortgages that may allow them to borrow up to six times their basic salary. These mortgages for doctors are designed specifically for medical professionals with strong career progression and high earning potential, taking into account future income expectations.
This higher borrowing capacity can help doctors borrow more to secure a better home, move up the property ladder quicker, and access better mortgage deals.
How Much Can You Borrow?
Typically, doctors can borrow around 4.5 to 5 times their gross income. The exact amount will depend on the mortgage provider’s lending criteria, your deposit size, credit score, and outgoings. Some lenders offer professional mortgages that allow newly qualified doctors to borrow up to six times their income, particularly if you have a strong credit rating and financial health.
Using a specialist mortgage broker ensures you find the best mortgage to match your needs.
What Credit Score Do I Need?
The credit score required to get a mortgage depends on factors like your deposit size and other financial commitments. Most high street lenders prefer a reasonable to good credit history. Occasional small issues may be overlooked, but if you have complex circumstances, a specialist mortgage broker can connect you with specialist lenders who better understand your situation.
Maintaining a good credit rating by staying on the electoral roll, managing monthly repayments, and clearing existing debt can significantly improve your mortgage application.
Can I Use Bursary Income for a Junior Doctor Mortgage?
Yes, some mortgage lenders consider bursary income alongside earned income when assessing a mortgage application. This additional income can help many junior doctors increase their borrowing capacity and secure the best deal available.
Working with an experienced mortgage broker ensures that all income sources, including bursaries, overtime, and locum income, are properly considered to maximise your mortgage offer.
Are There Mortgages Specifically for Doctors?
While there aren’t many exclusive “doctors mortgages,” certain specialist lenders understand the unique challenges doctors face. These lenders offer mortgage products tailored to medical professionals, considering factors like locum income, career progression, and complex pay structures.
Professional mortgages are more accessible to medical professionals through a specialist broker who knows how to get a mortgage approved under these circumstances.
The Impact of Student Loans on Junior Doctor and Trainee Doctor Mortgages
When applying for a mortgage, student loan repayments are considered in affordability assessments. Lenders focus on the monthly repayment amount, not the total outstanding loan.
Therefore, a large student loan balance should not prevent you from getting a mortgage, as long as your income-to-expenditure ratio remains healthy.
An independent mortgage adviser can help you navigate these considerations and find the best mortgage to suit your situation.
Best Rates for Mortgages for Doctors
Doctors typically have access to the same mortgage rates as any other borrower, provided they meet the lender’s eligibility criteria. While there are no exclusive rates solely for NHS workers, the stable income and strong career progression associated with the medical profession often make doctors attractive clients for mortgage providers.
This means doctors can often access the best mortgage rates, whether seeking a fixed rate mortgage or variable rates, especially when guided by a specialist broker.
How Can Strive Help?
At Strive, we specialise in helping medical professionals, including junior doctors, navigate the whole process of applying for a mortgage.
We connect you with mortgage lenders who appreciate your career history, understand your complex income structures, and offer better interest rates and flexible lending criteria.
Whether you are looking to get a mortgage as a first time buyer, switch from an existing home, or step up the property ladder with a buy ISA savings boost, Strive is here to make the mortgage process stress free.
With Strive’s expertise, you can approach your mortgage application confidently, knowing you have access to the best mortgage options and advice from specialist mortgage brokers dedicated to supporting doctors and healthcare workers.
We’d love to hear from you – get started online or call us on 0330 043 1121 today to speak with one of our expert advisers.
Talk to a mortgage expert today for the best deal.
Frequently Asked Questions
A few specialist lenders and some high street lenders, such as The Co-operative Bank and Metro Bank, are known for offering professional mortgages specifically tailored to doctors. Working with a specialist mortgage broker ensures you access the best deals suited to your needs.
While there aren’t many mortgage products exclusively for doctors, specialist lenders and mortgage brokers understand the unique challenges facing medical professionals and can offer tailored mortgage options that account for career progression, complex pay structures, and future mortgage growth.
Yes, trainee doctors can get a mortgage. Mortgage lenders recognise the strong earning potential and career stability of doctors in training. Specialist brokers often help newly qualified or trainee doctors navigate complex circumstances such as short employment history or bursary income to secure mortgage approval.
Yes, many lenders allow doctors to borrow up to 5 times their basic salary — and some professional mortgages allow even more depending on your credit history, deposit size, and overall financial health. Working with a mortgage broker can help you find the best deal based on your circumstances.
Not necessarily. Many junior doctors take on locum contracts, and while locum income can be seen as less stable by some high street lenders, specialist brokers know which mortgage providers will accept locum income with just a few months of history. Providing strong evidence through pay slips, bank statements, and credit reports improves your application process.
Jamie Elvin
Jamie is an expert in all things mortgages, and our most experienced broker. Connect with Jamie and get started to see how Strive Mortgages can help you.
