Doctors do not get better mortgage rates in the way the question usually implies. Physician mortgage rates run within roughly half a percentage point of conventional rates in either direction, so the honest answer to do doctors get better mortgage rates is that the rate itself is a wash. What doctors get is a different loan structure: no private mortgage insurance, zero down payment on loans up to about $1 million, and underwriting that sets student debt aside. For a physician with $250,000 in loans and little cash, that structure is worth far more than a fraction of a point on the rate.
How Physician Mortgage Rates Compare to Conventional Rates
Physician mortgage interest rates are not discounted. They generally fall within about 0.5% of conventional rates, sometimes lower, sometimes higher. Lenders that price them slightly below conventional are buying a long-term banking relationship with a high earner. Lenders that charge a modest premium are compensating for the risk of lending without a down payment or mortgage insurance to fall back on.
That premium, when it exists, makes sense from the lender’s side. A conventional borrower putting 20% down gives the lender an immediate equity cushion. A physician borrower putting nothing down does not. Rather than requiring insurance against default, the lender bakes that risk into the rate.
Both fixed-rate and adjustable-rate options exist. ARMs start with a lower fixed rate for an initial period, commonly five, seven, or ten years, then adjust against a benchmark like the Secured Overnight Financing Rate plus a lender margin. One program adjusts every six months after the fixed period based on the 30-day average SOFR plus 2.75 percentage points, with a 5% lifetime cap.
Where the Real Savings Come From
The rate is not where doctors save money. Three structural features are.
No Private Mortgage Insurance
On a conventional mortgage, any down payment below 20% triggers PMI, which typically costs between 0.58% and 1.86% of the loan amount per year.1Fannie Mae. What to Know About Private Mortgage Insurance On a $750,000 loan, that is roughly $4,350 to $13,950 a year, and none of it builds equity or pays down principal.
Physician mortgages waive PMI regardless of down payment.2BMO. Physicians’ Mortgage Program On a large loan with nothing down, that single benefit can save $500 to $1,000 a month compared to a conventional mortgage carrying PMI. That monthly savings usually swamps whatever rate premium the physician loan carries.
Zero Down on Loans Up to About $1 Million
Most physician programs offer 100% financing up to roughly $1 million, with down payment requirements rising above that. BMO’s program, for example, offers 100% financing up to $1 million, 95% up to $1.5 million, and roughly 90% up to $2 million.2BMO. Physicians’ Mortgage Program The gap between the most and least generous programs can run to hundreds of thousands in available financing at a given down payment level, so comparing three or four lenders is worth the effort.
Career stage does not disqualify you. Attendings, fellows, and residents all qualify. If you have signed a residency contract but not started, most programs will approve based on that contract alone, with an employment start date up to 90 days after closing.2BMO. Physicians’ Mortgage Program Eligibility is tied to your degree: MD, DO, DDS, DMD, and DPM at nearly every lender,3Truist. Doctor Loans Mortgages for Eligible Physicians and Dentists with veterinarians and optometrists added at some.4Fifth Third Bank. Do I Qualify for a Physician Mortgage
Student Debt Handled Differently
This is the underwriting feature that changes everything for residents. Conventional guidelines often force the lender to impute a monthly student loan payment of 0.5% to 1% of the total balance when the actual payment is low or in deferment. For a doctor with $300,000 in student loans, that imputed payment could be $1,500 to $3,000, which destroys the debt-to-income ratio even when nothing is actually being paid.
Physician mortgage lenders often exclude student loans from the DTI calculation entirely when the loans are deferred for at least 12 months beyond closing. Some exclude them regardless of deferment status. When loans aren’t deferred, many programs use your income-driven repayment amount instead of an imputed figure. A $200 IDR payment counts as $200, not $2,500. The difference in borrowing power is enormous.
When a Conventional or VA Loan Beats a Physician Mortgage
If you have saved 20% down and your student debt is under control, a conventional mortgage will almost certainly deliver a lower rate with far more lender competition. The physician mortgage exists to solve a specific set of problems: no savings, high student debt, and an employment contract instead of pay stubs. When none of those apply to you, the conventional route is usually cheaper over the life of the loan.
For doctors who are also veterans, VA loans deserve a close look. VA loans require no down payment and no PMI and typically carry lower rates than either physician or conventional mortgages. The main cost is the VA funding fee, roughly 2.15% to 2.3% of the loan amount for first-time use with no down payment, and it rolls into the balance. A service-connected disability waives the fee entirely, which usually makes the VA loan the better deal.5Department of Veterans Affairs. Circular 26-17-02 Clarification and New Policy for Student Loan Debts and Obligations
The Trade-Offs the Rate Question Hides
A comparable rate is not a free lunch. Physician mortgages carry risks that conventional 20%-down borrowers don’t face.
Zero down means zero equity cushion. If your home’s value drops even modestly after purchase, you are underwater. Doctors relocate often during early careers, for fellowships, first attending positions, and practice moves. Negative equity makes selling difficult and expensive, and this is where most physician mortgage regrets originate.
The approval amount is not a budget. Getting approved for $1.2 million doesn’t mean that payment fits alongside student loans, disability insurance, retirement contributions, and normal living costs. Residents who buy at the top of their approval on the strength of a future attending salary often spend years stretched thin. Budget from your current income with room to spare, not the income you expect in five years.
ARMs assume everything cooperates. Taking an adjustable rate and planning to refinance before the adjustment kicks in is a bet on your income, your home’s value, and interest rates all lining up. If prices stall and you have no equity, refinancing may not be available when you need it.
Fewer lenders, less pricing pressure. Conventional mortgages are offered by thousands of competing lenders. Physician programs come from a much smaller pool, which can mean slightly higher pricing and less room to negotiate.
Using a Physician Mortgage Now and Refinancing Later
A common approach that often works: use a physician mortgage to buy during residency or early practice, then refinance into a conventional loan once the financial picture improves. After a few years on an attending salary, income is higher, DTI is better, credit is stronger, and the home has ideally appreciated enough to reach 20% equity. All of that can qualify you for a conventional refinance at a lower rate even if market rates have not moved.
Most physician mortgages carry no prepayment penalty, so this exit stays open. If you took an ARM, refinancing before the fixed period ends matters more, not less. Build the refinance timeline into the purchase plan from the start rather than treating it as something to figure out later.