Mortgages for Dentists

What mortgages are there for dentists?

Lenders use a variety of criteria to determine whether you are an acceptable borrower, so it may just be a question of finding the best lender for you — some are better equipped to meet the demands of dentists than others. Nonetheless, there are still some general recommendations to bear in mind before you start looking for a mortgage as a dentist.

The most important factor in any mortgage application is affordability. Lenders will want to see that you have a strong and steady income and that you are not overstretching yourself financially. As a dentist, you should have no problem meeting these criteria.

Another key consideration is the deposit. For most dentists, this is likely to be a significant sum of money. Lenders will generally require a deposit of at least 10%, but the higher the deposit, the more favourable the terms of the mortgage are likely to be.

How do lenders calculate mortgage loans for dentists?

Borrowing limits are determined by a variety of factors, including:

• Your income
• Your deposit
• The value of the property
• Your credit score
• Your other financial commitments

As a dentist, you are likely to be in a strong position when it comes to applying for a mortgage. Your income is usually high and stable, and you should have no problem securing a competitive interest rate.

The key issues for dentist mortgages

A Dentist’s income can often be hard for inexperienced high-street banks or building societies to comprehend. What’s more, because of how self-employed dentists’ incomes are taxed, some lenders view them as higher risk. This means that it can be difficult to find a mortgage if you’re a dentist — but it’s not impossible. You may just need to put in a little extra legwork to find the right deal.

First, we need to establish some of the basics, starting with your employment status: are you an employee, or are you self-employed?

If you’re an employee, your income is taxed at source, your dental practice is responsible for paying your salary, with any tax due already calculated and paid to HMRC through a regular (usually monthly) payroll – this is known as Pay As You Earn (PAYE).

Self-employment, on the other hand, means that you are considered to be in business for yourself. This might be as a sole trader, in a partnership, or through a limited company. If you’re self-employed, it’s your responsibility to calculate and pay any tax you owe to HMRC. Many associate dentists, for example, are self-employed.

To assess affordability, most lenders will request at least one year’s worth of accounts from self-employed applicants. They could also ask for some recent SA302’s. This is because they need to establish your level of income and calculate an average earnings figure. If you have only recently become self-employed, some lenders may accept a copy of your contract with your dental practice, along with HMRC tax returns for the previous year.

It’s worth bearing in mind that some lenders may have different criteria for employed and self-employed applicants – so it’s always best to check with your broker.

If you’re an employed dentist, you’ll probably find it easier to get a mortgage than if you’re self-employed. This is because most lenders will use your salary as proof of income, and employment contracts tend to be more secure than self-employment.

You may find our Guide to Self-Employed Mortgages helpful.

Can Junior dentists get a mortgage?

It can be more difficult for junior dentists to get a mortgage, as they often do not have a long track record of income. However, some lenders are more flexible than others and may be willing to consider other factors such as the amount of deposit you have saved up.

Generally, junior dentists are on much lower incomes than more experienced practitioners. This can make it difficult to afford a mortgage, particularly if you are looking to buy a property in an expensive area.

Will I be able to get a mortgage if I’m a self-employed dentist?

It can be more difficult to get a mortgage if you’re self-employed, as most lenders will require proof of income. This means that you will need to provide accounts or tax returns for the previous year.

If you have only recently become self-employed, some lenders may be willing to accept a copy of your contract with your dental practice, along with HMRC tax returns for the previous year.

Many general practice dentists looking for a mortgage are self-employed contractors, frequently mixing NHS with private work. To assess affordability, most lenders will request at least one year’s worth of accounts from self-employed applicants. This is because they need to establish your level of income and calculate an average earnings figure.

Ask your broker what each lender may ask for.

How can a mortgage broker assist me with my mortgage?

A mortgage broker can help you to compare different deals from a range of lenders and find the one that’s right for you. They will also be able to advise you on the best way to approach a certain lender and can negotiate on your behalf to get the best deal possible.

There are several benefits to using a mortgage broker:

• You can save time by having someone else do the legwork for you
• Our brokers are experienced in helping dentists
• A mortgage adviser can help you to find deals that you may not be able to find on your own
• They can negotiate on your behalf to get the best possible terms
• If you are self-employed, a broker can help you to put together the necessary documentation to support your application.