Are Physician Loans Worth It?

Are Physician Loans Worth It?

Table of contents

When buying a home, the average home buyer takes out a mortgage that typically requires good credit, a low debt-to-income ratio, and a down payment of around 20%. Unfortunately, as new physicians and despite high wages, many doctors are unable to meet the mortgage requirements due to high debt-to-income ratios. Because of this, many lenders offer what are known as physician mortgage loans. But what is a physician loan and are they worth it? These specialty loans help physicians qualify for a mortgage under special terms, however, they do come with pros and cons that you must consider.

Key takeaways

  • Physician loans are specially-designed loans for physicians that offer no down payment, high loan limits, and a higher debt-to-income ratio.
  • They are more flexible in the underwriting process, allowing for a better chance of loan approval, but can have higher interest rates and long-term costs.
  • Physician loans may be the only way for new physicians to qualify for a mortgage due to high student loan debt.
  • Benefits of physician loans include little to no down payment, higher debt-to-income ratio allowance, and higher loan limits.
  • Disadvantages include adjustable-rate mortgages only, higher interest rates, and increased risk of overleveraging.

What is a physician loan?


As a new physician, struggles with huge student debt and often low credit scores, make it difficult to qualify for a conventional mortgage despite having a significant income. In addition, saving for the down payment is often out of reach. Physician loans take this into account and offer specially-designed loans for physicians. These loans offer no down payment or mortgage insurance requirements, have high loan limits, and allow for a much higher debt-to-income ratio.

Who qualifies for physician loans?


Physician loans are available for physicians and healthcare professionals, including osteopathic physicians. Some lenders offer these loans to other healthcare professionals as well, such as veterinarians, dentists, and orthodontists.

Stethoscope and banknotes

How does a physician loan work?


A physician loan works similarly to a conventional loan except with more flexible underwriting ability. You are not required to make the traditional 20% down payment, nor are you required to carry private mortgage insurance (PMI). When making a lending determination, lenders look at the monthly debt payment amount and not the overall debt, such as student loan totals. This allows for more flexibility and a greater chance of qualifying for the mortgage.

In addition, physician loans have higher limits than some conventional loans, often allowing for the financing of homes greater than $1 million. However, because of the increased risk to the lenders, the interest rates may be slightly higher than conventional mortgages.

Do doctors get better mortgages?


When it comes to a physician loan, it isn’t so much that it is a better mortgage that a non-physician would qualify for, but rather that it is a mortgage that offers more flexibility in the underwriting process, allowing for a better chance of loan approval. Because of high student loan debt, many new physicians would never be able to qualify for conventional mortgages and a physician loan makes it possible. However, because of the increased risk to lenders, these loans can have higher interest rates, making them actually more costly in the long run than a conventional mortgage. Do they offer physicians a benefit when it comes to purchasing a home? Yes. But, in the long run, the physician pays for this benefit.

Are physician loans a good idea?


Whether or not a physician loan is a good idea depends on your financial situation. In many cases, a physician loan is the only way you may qualify for a mortgage, especially if you still hold a significant amount of med school student debt. However, keep in mind that you will pay for these additional up-front underwriting benefits with a higher interest rate and higher costs over the long term. If you can make a significant down payment, it may be more beneficial to try and qualify for a conventional loan with a lower interest rate. When determining which loan option is best for you, here are some benefits and disadvantages to consider when it comes to a physician loan.


  • Little to no down payment, meaning 100% financing
  • Higher debt-to-income ratio allowance
  • Minimal credit, employment, and income requirements
  • No private mortgage insurance requirements
  • Higher loan limits, allowing for as much as $2 million in financing


  • Adjustable-rate mortgages only
  • Higher interest rates
  • Can only be used for primary residences
  • Increased risk of overleveraging and buying more houses than you can afford
Couple carrying boxes moving to new home.

Using a physician loan to get your dream home


If you are considering buying a home, it is important for you to evaluate whether a physician loan is your best option or if you are better off waiting until you can qualify for a conventional mortgage. While the physician loan does offer many upfront benefits, allowing you to buy your dream home sooner, you will ultimately pay more in the long run.

At Hero Home Programs, our goal is to help every potential homeowner find and move into the home of their dreams, and this includes healthcare workers. We work with borrowers to find their best loan options and help them navigate through the home-buying process. To learn more about how our team of professionals can help you find the home of your dreams, schedule a call with us today.

Picture of Jacquelyn Sublett
Jacquelyn Sublett

I love teaching and writing on real estate, finance and mortgage topics. I find it fulfilling hearing stories of first time home buyers who we have helped with the home buying process. Writer for the Hero Homebuyer Programs™

Connect with the Author:

Recommended Posts

What Our Buyers Think

Jules S.
Read More
"5 star service is what you will get when you work with him!ᅠ Not only does he know his product like no other, he makes a special point of communicating throughout each transaction and his follow up skills are unparalleled. Perhaps most importantly, he delivers on his promises!ᅠ Give him a try for your mortgage needs.ᅠ You will not be disappointed!"
Jeremy H.
Read More
"An outstanding job handling refinances.  One of those knowledgeable, straight-shooters - which is really appreciated when you're shopping for a home loan. He can answer a million of questions with ease.  Looking back at the responsiveness, he was outstanding and you can do everything he suggested."
Jaina D.
Read More
"You can rely on them, very professional and quick in responding to your queries. He is very friendly and makes sure we understand the process and keeps us posted on the status of our loan. His efforts are greatly appreciated."
Eshawn W.
Read More
“By far the best lender we’ve worked with. Got us the best loan amount than any other lender. He worked with us hand in hand, he is professional, and he made the process enjoyable.”
Jaina D.
Read More
"You can rely on them, very professional and quick in responding to your queries. He is very friendly and makes sure we understand the process and keeps us posted on the status of our loan. His efforts are greatly appreciated."
Cass Z.
Read More
“I called looking for information about the process of applying for a mortgage/refinance and am just blown away with how helpful the information I received was!”
Stephanie F.
Read More
“I have hope because of you for making my home ownership dream come true. I feel such a connection with you and am excited to work with you. Have an amazing day!”
Rachel S.
Read More
"Highly ethical, attentive and helpful! A fantastic combination of personable and hard working. He makes everyone feel important and understood."
Cliff S.
Read More
“Hands down the best mortgage professional I’ve worked with in 20 years. Knowledgeable, honest, reliable and above all an outstanding communicator.”
Jose A.
Read More
"He worked on getting the lowest rate and kept me informed on each step of the process from the beginning to closing. Thank You!"
Nicholas H.
Read More
“Thank you for your prompt help and AMAZING assistance. Hands down, best lender I have ever worked with. Top notch!”
Read More
“I would be 100% interested in working more with you! You have proven to be an amazing lender”
Sandy C.
Read More
“Absolutely the most knowledgeable, friendly and honest expert I’ve ever worked with!”
Steve R.
Read More
"A pleasure to work with. He was very prompt and courteous with his responses and genuinely cares about the clients he works with."
Kevin H.
Read More
"Professional, responsive and honest assistance with the whole refinancing process from beginning to end."

We help you reach home ownership.

No catch. No hidden fees.

Have you served in the military or your community as a healthcare provider, teacher, or first responder? Are you a member of your local union or work for your city government?

Are you looking to buy a home but don’t know where to start when it comes to finding your best home financing options?

At Hero Home Programs™, our teams are dedicated to helping community heroes like you through the home purchasing process by finding the best grants, rebates, and loans in your area in order to maximize your savings and help you achieve homeownership.

Contact our team today to learn how we can and mortgages can change your life.

Resource Guides

Complete A to Z guides on your home purchase journey.

Learn about the process for getting a home loan

What steps you can take to improve your credit score

Tips and tricks for moving into your new home

Your step-by-step guide for buying a new home

Scroll to Top