The Pros and Cons of Having a Mortgage under the Physician Loan Program

In 2006, Bank of America realized that there was a great potential in securing newly trained physicians to have a mortgage. On average, US physicians are close to 30 years old when they complete residency and many are married and looking to buy their first home. With large amounts of debt, minimal prior work experience or credit history, and not enough money saved for a down payment, these new physicians were initially unlikely candidates for having a mortgage. Many banks have followed pursuit and taken advantage of their large earning potential by creating physician loans with no money down and loads of interest. Below are the pros and cons of utilizing the physician loan program.


  • Zero or little money as a down payment
  • No mortgage insurance
  • Usually, will accept employer contract as evidence of future earnings
  • Sometimes doesn’t calculate student loans toward the loan to income ratio or uses a modified payments similar to the Income Based Repayment/Pay As You Earn calculation.


  • Higher interest rate
  • Other options like FHA loan or a traditional 30-year mortgage may have lower monthly mortgage payments.
  • May only be available for certain type of homes

Banks usually take advantage of physician’s financial ignorance and have higher interest rates. Physicians may not realize that the traditional 30-year mortgage may be a better option if interest is lower. However, physicians may go with a physician loan to avoid the Private Mortgage Insurance – PMI.

Despite the pros and cons of a Physician Loan Program, the choice depends entirely on your financial situation and your long-term housing goals. Speak with physicians who have utilized the physician loan program and analyze the monthly mortgage payments for both options.

If you want to see a comparison of physician loan programs state by state, try

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