Mortgage guide for doctors

Why it can be hard for a doctor to get a mortgage

Applying for a mortgage is rarely good for the blood pressure. But when you’re a doctor, things can be even more stressful – as your job presents its own unique challenges.

Understanding these challenges, and the steps you can take to overcome them, will be key to a successful application.

Let’s start by looking at why doctors can sometimes be at a disadvantage with regular mortgage lenders:

High levels of student debt

You don’t need us to tell you that medical training is long and expensive. If you’re still at the start of your career, this often means high levels of student debt. 

That’s a problem for many mortgage lenders, as your debt repayments reduce what you can afford to pay towards your mortgage each month. So, it's important to find a lender who will think about your longer-term earning potential.

Short-term contracts

Early in your medical career, you may be working a series of short-term training contracts across multiple NHS employers. 

If a lender doesn’t understand the nature of your work, they may see this as a lack of job security. The stability of your income is key when lenders look at your ability to pay the mortgage back.

Complex income

Medical practices are often set up as partnerships. That means GP income is sometimes made up of ad-hoc drawings or dividends rather than a regular salary. 

This can make it harder to prove your affordability for a mortgage. Especially if your lender isn’t used to providing mortgages for doctors.

If you do locum work, or work across both NHS and private practices, the varied hours and income can make mortgages difficult too.

You need to find a lender who will look at your earnings over a longer period in order to get the best mortgage offer.

A history of moving

As a doctor in the UK, you'll be no stranger to moving multiple times during your training to be closer to the site of your next rotation. This makes it hard to settle down and buy a house. It can also affect your chances of getting a mortgage.

Frequent changes of address can affect your credit score if you’re not careful to leave a clear credit trail. Living in shared accommodation can cause its own issues too, as you’ll see later in this guide.

And let's not forget the non-British doctors working in the UK. When it comes to getting a mortgage, a history of living abroad can make it harder for lenders to assess credit history.

Professional mortgages for doctors

We’ve diagnosed some of the challenges that doctors can face when seeking a mortgage. But what’s the cure? One option worth looking at is a professional mortgage. 

Professional mortgages aren’t just for doctors. They’re available to a wider group of professions associated with higher long-term earnings. This usually includes:

• Doctors
• Dentists
• Accountants
• Solicitors
• Teachers
• Pharmacists

These jobs are often seen as a more reliable long-term risk. It can mean better interest rates, more generous mortgage offers and low-deposit mortgages in many cases.

Eligibility criteria varies between lenders. Usually, it includes factors such as your age, professional qualifications, or registration with an industry body like the British Medical Association (BMA).

Your employment status will also need to be taken into account. If you're applying for a mortgage as a self-employed person (for example, a locum or practice owner), you may be asked to supply additional documentation to prove your income and show that you can afford your monthly repayments.

At Wesleyan Financial Services, we act as a mortgage broker with access to a number of professional mortgage lenders.

Remember your mortgage is secured on your home. Your home may be repossessed if you do not keep up repayments.

The benefits of using a specialist broker

As well as providing access to professional mortgages for doctors, Wesleyan Financial Services also manages your application. We liaise with the lender on your behalf for the best possible outcome.

We’ll assign you a Specialist Financial Adviser who works specifically with hospital doctors and GPs. Someone who understands your career progression, sick pay entitlements, pension contributions and more. 

This means they can help the lender truly understand what you can afford to borrow in the long term.

Credit score considerations

Whether you’re applying for a professional mortgage or not, your credit score will play a key part in the lender’s decision. 

Your credit score represents your creditworthiness. In other words, how reliable a risk you are to the lender. For more details on what a credit score is, look at our guide to buying your first home.

Before starting a mortgage application, it’s a good idea to check the health of your credit score. You can do this using a service like Experian or Equifax. Even if you’re not ready to buy a place yet, it’s wise to get on top of your credit score as soon as you can. 

Lots of things can affect your credit score. Your debt levels, bill payment history and any previous applications for credit all play a part. 

Your address history is important too. If you moved around a lot during your training rotations, you might want to check some of the following things:

Are you on the electoral roll?

Whenever you move, registering on the electoral roll in your new area should be one of the first things you do. If you haven’t registered in previous places you’ve lived, there’s not much you can do about it. Just make sure you’re on the electoral roll now.

The electoral roll helps lenders confirm where you’ve really been living. For example, if you’ve moved around a lot, you may still have bank statements addressed to your parents’ house. Without electoral roll and council tax records, it might look like you still live there.

Is your credit profile linked to others?

If you lived in shared houses during your training, or at any point since, your credit history could be linked to your previous housemate(s).

If someone from the same address has had a credit application refused in the past, it may wrongly appear on your record. Check your profile carefully and report anything that’s not right.

Is your address history correct?

Evidencing your address history is no mean feat for a doctor who may have moved around a lot. Make sure your address history is completely accurate and up to date, with no gaps to account for.

Check your visa

It’s not something you’ll find on your credit profile, but if you’re a foreign national, lenders will likely want to see how long is left on your tier 2 visa.  Make sure you have this information to hand before you start your mortgage application.

Proving your financial health

As well as proving yourself credit worthy, you’ll need to show lenders that you can afford to pay back whatever they lend you.

As a doctor, the amount you earn will be influenced by several factors:

• Which part of the UK your NHS employer is located in: Pay bands can vary quite a bit across England, Scotland, Wales and Northern Ireland.
• What stage you’re at in your medical career: How far up the NHS pay scale you’ve progressed.
• Which type of contract you’re employed under: Is your pay set out under the 2002 or 2016 conditions of service?

These factors all affect your income. But affordability takes into account your expenses too. Lenders need to see that you can comfortably make your mortgage payments every month, after essential outgoings (tax, food etc).

That’s why it can be a good idea to produce a household budget that shows your monthly income and expenditure, even before you have to start submitting payslips, P60s and bank statements. 

It will show the lender that you're pro-actively managing your money. And that despite your lengthy hours at work, you’re still able to keep on top of your own financial health.