Doctors are in a fortunate position when it comes to securing finance—high income, strong employment prospects, and low default risk make them very attractive to lenders. As a result, banks and lenders often roll out the red carpet with exclusive loan products, waived fees, and borrowing advantages.
However doctors often squander this strong starting position when organising a home loan through a series of (avoidable) mistakes that can cost thousands over the life of the loan, or even lead to struggles getting finance.
Whether you’re buying your first home, upgrading, or refinancing, here are the top mistakes doctors make when it comes to home loans—and how to avoid them.
1. Paying Lenders Mortgage Insurance (LMI) When You Don’t Have To
Lenders Mortgage Insurance is a one-off fee that most borrowers pay when they have less than a 20% deposit. It can easily add tens of thousands of dollars to your loan.
But many doctors are eligible for LMI waivers up to 90–95% LVR, meaning you can borrow more with a smaller deposit and still avoid this hefty cost.
Unfortunately, some doctors aren’t aware of this and end up paying LMI unnecessarily—often due to using a lender who doesn’t offer this benefit or working with someone unfamiliar with how to access it.
This is not just a benefit available to senior doctors—interns, registrars and GPs are also eligible (there are also lenders who extend this benefit to registered nurses, physiotherapists and others).
A junior doctor recently secured a $1.2 million property with only a 5% deposit—all without paying LMI. Had they used a standard loan, they would have paid over $40,000 in LMI fees.
The fix: Before applying for a loan, check whether you qualify for an LMI waiver and make sure your lender is offering this. A broker who specialises in doctor lending can help you access lenders who offer this.
2. Underestimating Borrowing Power—or Overestimating It
Doctors typically have strong borrowing capacity due to their income, but it’s easy to miscalculate how much you can or should borrow.
Some doctors are overly conservative and end up buying a property that doesn’t meet their needs long-term, only to outgrow it and move again (which comes with more costs). Others overextend themselves, thinking future income will make up for short-term strain, only to feel financial pressure later—especially if income is irregular or if working hours reduce due to family or lifestyle changes.
The fix: Look beyond borrowing limits—consider lifestyle goals, career plans, children, and desired flexibility. It’s not just what you can borrow, but what you can afford to repay comfortably over the long term.
3. Using the Wrong Loan Structure
It’s easy to focus on getting the lowest interest rate and forget about loan structure—but this is where serious savings and flexibility can be won or lost.
Doctors often have complex financial lives: private practice income, PAYG contracts, Medicare billings, investment goals, and tax considerations. The right structure (fixed vs variable, offset account vs redraw, interest-only vs principal & interest) can make a big difference.
For example:
- Offset accounts can help you reduce interest without locking away funds
- Split loans give a mix of repayment stability and flexibility
- Interest-only periods might make sense if you’re investing, planning to turn a property into an investment down the track or managing short-term cashflow
The fix: Think strategically about how your loan structure fits into your broader financial plan. Don’t just chase rates—chase the right fit.
4. Not Planning for the Future
Many doctors delay retirement planning, assuming they’ll “figure it out later” or that they will be fine because they are earning a good income. But failing to plan usually means missing the chance to really strengthen your financial position.
Doctors can significantly benefit from creating a financial plan as a road map to achieving their goals. This can include many things but from the home loan side, in addition to strategic loan structuring, it means planning the path to being debt free by the time you want to slow down (or stop) work and maximising your mortgage for tax efficiency. Your home loan is a key piece of the financial puzzle.
The fix: Start with the end in mind. Work with a broker or financial adviser to plan ahead—consider how long you’ll hold your current loan, when you want to retire or reduce hours, and whether you want your property to be part of your wealth-building or downsizing strategy. The earlier you plan, the more options you’ll have.
5. Applying for a Loan with Disorganised Finances
Doctors are busy. Between long shifts, study, and practice management, paperwork isn’t always a top priority.
But poor documentation, disorganised financials, or over-complicated structures can slow down or derail your home loan application. And this will often happen at the “worst” time—just when you find the property you really want.
Lenders are strict about documentation, especially for self-employed or contracting doctors. Missing BAS statements, unclear tax returns, or complex trust arrangements can lead to delays—or a declined application.
The fix: Get your finances in order before applying. If you’re self-employed or earning from multiple sources, work with your accountant and broker to present clear, consistent documentation.
6. Failing to Understand Your Position (Through Lenders’ Eyes)
Doctors earn income in various ways—PAYG (base, overtime, allowances), contractor, locum, or private practice owner (sole trader, company, trust, service company)—and banks assess these income sources very differently. They are not treated the same.
Also, lenders only look at income to assess loan affordability. It is relevant that you own other assets (property, shares etc) but typically owning assets does not increase how much you can borrow without there being sufficient income.
The fix: Don’t assume all income is equal in the eyes of a lender. Get a professional assessment of your borrowing position before applying. A broker who understands medical income types can structure your application correctly and match you with a lender who recognises your income for what it is.
Bonus Tip: Use a Mortgage Broker Who Understands Doctor Home Loans
Doctors have access to a range of home loan offers that aren’t typically available to the general public, and aren’t available across all lenders (LMI waiver, discounted rates, more flexible lending policies).
But these benefits aren’t always easy to find—and they’re not offered by all lenders. One of the most common mistakes is going straight to their bank or choosing a broker who doesn’t specialise in working with medical professionals.
A mortgage broker who understands your profession knows which lenders offer tailored doctor home loans, what paperwork is required, and how to structure the application to maximise your borrowing power while protecting your financial future. In short, they will save you time, money and hassles by handling the paperwork and negotiations, making the loan process seamless.
The fix: Work with Hatch Financial Services, which specialises in mortgages for doctors and ensures you get the best possible loan.
The Bottom Line
Doctors are in a privileged position when it comes to borrowing—by avoiding these common mistakes, you can capitalise on this advantage and move further ahead financially.
Need expert advice to get it right the first time?
Talk to a mortgage broker who understands the unique lending needs of doctors—and can help you make the most of your position.
