Physician Mortgage Payment Calculator
Work out the monthly payment on a physician mortgage, and see what the same house would cost on a conventional loan at the same down payment. The difference is mortgage insurance, and on a smaller down payment it is usually a few hundred dollars a month.
Put in your own numbers. Use a rate you have actually been quoted if you have one, because rates move and a made up rate gives you a made up answer.
The House
The Rates
The Rest of the Payment
Your Monthly Payment
Physician Loan Against Conventional
The payment above is only as good as the rate behind it, and physician programs differ on how much they will lend and how little they will take down. Tell us your degree, your training stage, your state and your numbers, and we will point you at the lender whose rules fit.
How This Calculator Works
Your monthly payment is four things added together. Principal and interest, which is the loan itself. Property tax. Homeowners insurance. And HOA dues, if your neighborhood has them. Most lenders collect the tax and insurance along with the loan payment and hold the money for you, so one number leaves your account every month.
Principal and interest comes from three inputs and nothing else: how much you borrow, the interest rate, and how many years you have to pay it back. A longer term makes the monthly payment smaller and the total interest larger. That is the entire trade.
The fifth thing, the one this page is really about, is mortgage insurance. A conventional lender adds it when you put down less than 20 percent, and a physician loan does not add it at all. That single line is usually the whole gap between the two columns above.
What Mortgage Insurance Costs and When It Stops
Private mortgage insurance, usually shortened to PMI, is a monthly charge a conventional lender adds when your down payment is under 20 percent. It is worth being clear about what it buys: it protects the lender if you stop paying. It does nothing for you. You pay it, and someone else is the beneficiary.
What it costs depends on how much you are borrowing compared to the price of the house, and on your credit score. A rough range for a physician with strong credit:
| Down payment | Typical yearly rate | On a $570,000 loan |
|---|---|---|
| 3 percent | 0.75 percent | About $356 a month |
| 5 percent | 0.55 percent | About $261 a month |
| 10 percent | 0.40 percent | About $190 a month |
| 15 percent | 0.25 percent | About $119 a month |
| 20 percent or more | None | $0 |
It does not last forever. By federal law, the lender has to drop it automatically once your balance reaches 78 percent of what you originally paid for the house, and you can ask them to drop it at 80 percent. Getting there on the loan payments alone takes about eleven years on a 5 percent down purchase, which is longer than most people expect. You can usually get there faster by asking for a new appraisal once the house has gained value, though the lender sets the rules on that and some require you to have owned it for two years first.
Why a Physician Loan Skips PMI
A physician mortgage is held on the bank’s own books rather than sold to Fannie Mae or Freddie Mac. Because the bank keeps the loan, it writes its own rules, and it has decided that a doctor with a signed contract is a safe enough bet to lend to without insurance. The bank is taking on the risk itself instead of buying coverage and charging you for it.
That is a real advantage and it is worth knowing the shape of it. You are not getting a cheaper loan in every respect. Physician loan rates are sometimes a little higher than conventional rates, which is why there are two rate fields in the calculator above. Run it both ways with the actual numbers you have been quoted. If the physician rate is a quarter point higher but you skip $261 a month in insurance, the physician loan still wins comfortably. If the gap is a full point, it may not.
What This Calculator Does Not Do
It estimates. It does not underwrite, and it does not quote.
It does not tell you what you can qualify for, only what a given house would cost per month. Qualifying is a separate question that turns on your income, your other debts and how the lender counts your student loans, which is the single most variable piece of a physician’s application.
It uses a typical mortgage insurance rate for your down payment rather than a real quote, and the real one moves with your credit score. It does not include closing costs, and it assumes a fixed rate for the whole term, so the numbers will not hold if you are looking at an adjustable rate mortgage where the rate resets after a set number of years. It does not account for property tax increases, insurance increases, or special assessments, all of which are real and all of which go up.
Use it to understand the shape of a payment and to see what mortgage insurance is costing you. Then get real numbers from a lender who works with physicians.
Mortgage insurance cancellation rules from the Homeowners Protection Act of 1998. Mortgage insurance rate ranges reflect published rate cards from the major insurers and vary by credit score, loan amount and property type. Rates and figures on this page are illustrative defaults, not quotes.