Physician mortgage loans: how they work and what they cost
Reviewed by the Editorial Team · Updated October 18, 2026 · 10 min read
A physician loan is a mortgage written for doctors early in their careers. Lenders typically keep it on their own books, which lets them accept 0–10% down, skip PMI and count a signed employment contract as income. You pay for that in a higher rate, not in monthly insurance.
Key takeaways
A physician loan lets eligible doctors buy with 0–10% down and no PMI, because the lender keeps the loan and prices the risk into the rate.
On a $600,000 home, nothing down costs $4,167 a month at an illustrative 7.43%, against $3,252 with 20% down, and keeps $120,000 in the bank.
Against 10% down with PMI at $3,883–$4,108 a month, the physician payment is close, but PMI can end and a rate premium of 0.125–0.25 percentage point does not.
Programs typically lend up to roughly $1 million–$2 million at the lowest down payments, look for scores around 700 or higher, and often use adjustable-rate terms.
Down payment
0–10% at most programs
Mortgage insurance
None; the cost sits in the rate
Rate vs. conventional
Commonly 0.125–0.25 percentage point higher
Loan size, low down
Roughly $1 million–$2 million
30-year fixed average7.18%Freddie Mac PMMS · Nov 5, 2026.
$600,000 home, 0% down$4,167/moAt an illustrative 7.43%, no PMI. vs 10% and 20% down ↓
How a physician loan works
A physician loan is a mortgage a lender writes for doctors and typically holds in its own portfolio rather than selling to Fannie Mae or Freddie Mac. Because the lender sets the rules, it can accept 0–10% down, skip PMI and underwrite on future earnings.
Loan size: up to roughly $1 million–$2 million at the lowest down payments
Credit: scores around 700 or higher at many lenders
Income: a signed employment contract can count before your start date
These are market products, not a federal program like FHA or VA, so terms differ by lender. The common thread is that the lender takes on the risk a PMI company would otherwise cover, and prices it into the rate.
Who counts as a physician
Eligibility usually starts with an MD or DO degree, and many lenders extend it to dentists and some other doctoral clinicians. Residents and fellows often qualify on a signed contract. Each lender publishes its own list, so confirm your degree before you apply.
How student loans are counted
Many physician programs exclude student loans that are in deferment or forbearance from your debt-to-income ratio, or count a reduced payment. That can raise the loan you qualify for, and it is a large part of the appeal.
Fannie Mae's Selling Guide (B3-6-05) shows the conventional benchmark. It uses the payment on your credit report, allows a documented $0 income-driven payment, and counts 1% of the balance or a fully amortizing payment for deferred loans.
How much you can borrow
Your loan is the price minus your cash, so every dollar you skip at closing is borrowed. Larger loans usually need more down. Above the conforming loan limit, compare the program with a jumbo loan.
Cash down and loan size on a $600,000 home
How much you can borrow
Down payment
Cash down
Loan amount
0%
$0
$600,000
5%
$30,000
$570,000
10%
$60,000
$540,000
20%
$120,000
$480,000
Because a physician program has no PMI step to avoid at 20%, a bigger down payment only shrinks the balance and the payment. The trade-off is cash you may not have yet, which is why the next section prices all three.
What a physician loan really costs
Take a $600,000 home. A physician loan with nothing down borrows the full $600,000 at an illustrative 7.43%, about a quarter of a percentage point above the Freddie Mac 30-year average of 7.18% that both conventional options use. Monthly figures are principal and interest, plus PMI on the 10% option; taxes and insurance are extra.
Worked exampleA $600,000 home for a new physician
What a physician loan really costs
Loan
Cash down
Rate
Monthly
Physician loan, 0% down, no PMI
$0
7.43%
$4,167
Conventional, 10% down + PMI
$60,000
7.18%
$3,883–$4,108 PMI ends later
Conventional, 20% down
$120,000
7.18%
$3,252
Cash kept vs 20% down$120,000often what a resident or new attending doesn't have yet
Monthly cost of borrowing it all+$915vs the 20%-down conventional payment, for the life of the loan unless you refinance
Conventional rate: Freddie Mac PMMS 30-year average 7.18% (Nov 5, 2026). Physician-loan rate is illustrative (+0.25 percentage point); many physician programs are adjustable-rate or priced differently. PMI at 0.5–1.0% a year. Taxes and insurance are extra. Compare with PMI
The physician payment is $4,167 a month, $915 more than the $3,252 on the 20%-down loan. Most of that gap repays the $120,000 you did not put down; the rate premium is the smaller piece, and it lasts as long as the loan.
Against 10% down the gap narrows. Conventional with PMI costs $3,883–$4,108 a month, close to the physician payment, while you keep an extra $60,000 in cash. When the PMI ends the conventional payment drops; the physician premium stays.
Decide what the cash is for
If the $120,000 you keep will cover moving costs, an emergency fund or student-loan payments, the monthly gap buys real protection. If it would sit idle, a larger down payment lowers both the balance and the payment.
Costs outside the rate
The rate is only one line on the Loan Estimate. These terms shift from one physician program to the next, and any of them can change what the loan costs over time:
Rate premium: commonly 0.125–0.25 percentage point above comparable conventional loans
Adjustable terms: many programs reset after an initial fixed period
Fees: origination and underwriting charges vary by lender
Size tiers: more down is often required on larger loans
When a physician loan goes wrong
Physician loans rarely fail at closing. The trouble comes later, when a payment sized for a future attending meets a trainee's budget, or an adjustable rate resets. Check these four before you sign:
Permanent premium: the higher rate stays after PMI would have ended
Rate reset: an adjustable payment can rise after the fixed period
Thin equity: selling soon after closing can require cash at the table
Payment vs. paycheck: approval on future income can outrun today's budget
Conventional PMI has an end date. The CFPB explains that you can request cancellation at 80% of the home's original value and that it ends automatically at 78%. A physician loan's higher rate has no such trigger; only a refinance or payoff removes it.
Stress-test before you sign
Price the payment with your student loans at 1% of the balance a month, the way Fannie Mae counts deferred loans. If the total strains your take-home pay, borrow less or put down more, and plan a refinance review once your balance falls to 80% of the home's value.
Physician loan vs. conventional, FHA and VA
Physician loans compete with three other routes to a home on limited cash: conventional with 10% down and PMI, conventional with 20% down, and the government-backed FHA and VA programs. They differ most in down payment, insurance and who may use them.
Four ways to buy a home without a large down payment
Physician loan vs. conventional, FHA and VA
Physician loan
Conventional, 10% down + PMI
Conventional, 20% down
FHA or VA
Down payment
0–10%
10%
20%
FHA: 3.5%; VA: none
Mortgage insurance
None
PMI, cancellable at 80% of original value
None
FHA: 1.75% upfront + 0.55% a year; VA: funding fee only
Typical rate
Commonly 0.125–0.25 percentage point above conventional
Market rate
Market rate
Market rate, plus the insurance or fee
Loan size
Roughly $1 million–$2 million at the lowest down payments
$832,750, up to $1,249,125 in high-cost areas
Same limits; jumbo rules above them
FHA: $541,287 to $1,249,125 by county; VA: no cap with full entitlement
Student loans in DTI
Often excluded or discounted while deferred
Credit-report payment, or 1% of a deferred balance
Same Fannie Mae rule
HUD and VA set their own rules
Fits best
Doctors with thin savings and a signed contract
Buyers with 10% saved who want PMI that ends
Buyers with 20% saved
Lower scores (FHA) or eligible veterans (VA)
Pricing the 10%-down option is the quickest test. The mortgage calculator with PMI shows what your own price and rate cost, and the guide to PMI explains when it ends.
Who a physician loan fits
A physician loan fits doctors whose income is about to rise faster than their savings, and who value cash on hand more than the lowest rate.
Residents and fellows with a signed contract and start date
New attendings carrying large student-loan balances
Buyers who would rather keep cash than reach 20% down
Doctors planning to refinance once their equity builds
Skip it if you can put down 20% or more: a conventional loan then costs less each month, with no premium to carry. Skip it too if your degree is not on the lender's list, or if you are buying a rental, since programs are often limited to a primary residence.
Physician loans: pros and cons
Pros
Down payment of 0–10% at most programs
No PMI, even with little equity
Student loans often excluded or discounted
A signed contract can stand in for pay stubs
Cons
Rate commonly 0.125–0.25 percentage point above conventional
Many programs are adjustable-rate
Eligibility limited to certain degrees
Little equity cushion right after closing
What lenders look for
Underwriting is closer to a standard mortgage than the marketing suggests. Lenders look for a qualifying degree, a credit score around 700 or higher, and proof of income, which can be a signed contract if your start date is still ahead.
They also total your debts. Student loans may be excluded or discounted while deferred, but car loans, credit cards and the new mortgage payment still count, so a ratio that looks generous on student debt can still fail on everything else.
Requirements at a glance
A qualifying degree: MD or DO, and at many lenders dentists and some other doctoral clinicians
Credit score around 700 or higher at many lenders
Down payment within the program's 0–10% range, set by loan size
Signed employment contract or recent pay stubs documenting income
Student-loan debt documented; deferred balances may be excluded or discounted
Primary residence at most programs, within the lender's cap of roughly $1 million–$2 million
A physician mortgage is a loan a lender writes for doctors and typically keeps on its own books. That lets it accept 0–10% down, skip PMI and count a signed employment contract as income.
You pay for the flexibility through a rate commonly 0.125–0.25 percentage point above comparable conventional loans, and many programs are adjustable-rate.
Do physicians get better mortgage rates?
Usually not. Physician programs commonly price 0.125–0.25 percentage point above comparable conventional loans, because the lender carries the risk PMI would otherwise cover. What you get is a smaller down payment and no PMI.
In this example, an illustrative 7.43% physician rate compares with the 7.18% Freddie Mac 30-year average.
Which banks offer physician mortgages?
Large national banks, regional banks and some credit unions offer them, usually as portfolio products. There is no central list, and terms differ by lender: the down payment, loan cap, eligible degrees and whether the rate is fixed or adjustable.
Compare Loan Estimates from at least three lenders on rate, fees and reset terms.
What are the pros and cons of physician mortgage loans?
The pros are a down payment of 0–10%, no PMI, lenient treatment of student loans and approval on a signed contract.
The cons are a rate commonly 0.125–0.25 percentage point above conventional, adjustable terms at many programs, a restricted list of degrees and thin equity after closing. They suit doctors who value cash on hand over the lowest rate.
What is the average interest rate for a physician loan?
No standard benchmark tracks physician-loan rates, because lenders price these portfolio loans one by one. They commonly run 0.125–0.25 percentage point above comparable conventional loans.
In this example, an illustrative 7.43% sits about a quarter of a percentage point above the 7.18% Freddie Mac 30-year average. Treat that as a yardstick and compare real quotes.
What size mortgage can I get with a physician loan?
Many programs lend up to roughly $1 million–$2 million at their lowest down payments, with more down required on larger loans. Your income and debts set your own ceiling.
The example's $600,000 loan sits under the $832,750 conforming limit; above it, a conventional loan becomes jumbo and typically asks 10–20% down.
Who qualifies for a physician loan?
Eligibility usually starts with an MD or DO degree, and many lenders also accept dentists and some other doctoral clinicians. Expect to need a credit score around 700 or higher, documented income and, at most programs, a primary residence.
Each lender publishes its own list of eligible degrees, so check yours before applying.
Can residents qualify for a physician loan?
Yes — many programs accept residents and fellows, often on a signed employment contract before the start date. Lenders still check your credit score, your down payment and your debts.
Student loans in deferment may be excluded or discounted, though not at every lender, so confirm how a program counts them before you apply.
Do physician loans have PMI?
No — skipping PMI is the signature feature, even with 0–10% down. The lender absorbs that risk and prices it into the rate instead.
On a $600,000 home, conventional with 10% down and PMI runs $3,883–$4,108 a month against $4,167 for a physician loan with nothing down. PMI can end later; the rate premium cannot.
Can you refinance a physician loan later?
Yes — a physician loan is an ordinary mortgage, so you can refinance into a conventional loan once your income and equity allow. At 80% loan-to-value or less, a conventional loan carries no PMI.
Weigh the new loan's closing costs against the premium you would stop paying, and read your note for prepayment terms.
This guide is general information, not a lending decision. Program rules and dollar limits change — verify current figures with a licensed lender and confirm licensing at NMLS Consumer Access. See all loan types.
Nothing matches that. Try “refinance”, “FHA”, “Texas”, “Rocket” or “PMI”.