For many physicians, the idea of buying a home comes with one big question: how much do I really need for a down payment? After years of medical school, residency, and student loans, saving a traditional 20% down payment can feel unrealistic, even with a strong income. The good news is that physicians often have access to unique financing options, and a down payment as low as 0–10% is not only possible, but common.
Understanding how down payments work, and how they apply specifically to physicians, can help you make smarter decisions and enter homeownership with confidence.
The Traditional Down Payment Myth
Most people grow up hearing that you must put 20% down to buy a home. While that used to be the standard, it is no longer a requirement for most buyers. In reality:
- Many conventional loans allow 3–5% down
- FHA loans allow as low as 3.5% down
- Some specialty programs allow 0% down
The 20% figure mainly exists to avoid private mortgage insurance (PMI), not because lenders require it. For physicians, the rules are even more flexible thanks to specialized lending programs designed around your career path.
Why Physicians Are Treated Differently by Lenders
Physicians are considered low-risk borrowers for several reasons:
- High earning potential
- Strong employment stability
- Advanced education and professional licensing
- Historically low default rates
Even if you carry significant student loan debt, lenders understand that medical professionals typically experience rapid income growth. Because of this, many banks offer physician mortgage loans, which are tailored to doctors early in their careers.
These programs are specifically designed to reduce upfront financial strain, including lower down payment requirements.
Can a Down Payment Really Be 0–10%?
Yes. Many physician loan programs allow:
- 0% down for loan amounts up to a certain limit
- 5% down for mid-range home prices
- 10% down for higher-value properties
The exact percentage depends on:
- Purchase price
- Lender guidelines
- Your credit profile
- Income and employment contract
- Location of the property
Some lenders offer 100% financing, meaning no down payment is required at all. Others may require a small percentage once the home price exceeds a specific threshold.
This flexibility is one of the biggest advantages available to medical professionals entering the housing market.
What Happens If You Put Less Than 20% Down?
Normally, putting less than 20% down triggers private mortgage insurance (PMI). PMI protects the lender if a borrower defaults. It adds a monthly cost that can range from a few hundred dollars or more depending on the loan.
Here’s where physician loans stand out:
👉 Many physician loans do NOT require PMI, even with 0–10% down.
Instead of charging PMI, lenders offset their risk through slightly higher interest rates or internal underwriting models. For many doctors, avoiding PMI can save thousands annually while preserving cash reserves.
Benefits of a Low Down Payment for Physicians
A smaller down payment isn’t just about affordability, it can be a strategic financial move.
1. Preserve Cash Flow
Early-career physicians often face:
- Student loan repayment
- Relocation costs
- Licensing fees
- Insurance expenses
- Building emergency savings
Keeping more cash available allows flexibility during career transitions.
2. Invest Instead of Locking Money Into a House
A large down payment ties up capital in home equity. Some physicians prefer to:
- Invest in retirement accounts
- Build brokerage portfolios
- Maintain liquidity for opportunities
- Pay down higher-interest debt
Depending on your financial goals, a lower down payment may produce better long-term returns.
3. Buy Sooner Rather Than Later
Waiting years to save 20% could mean missing favorable interest rates or rising home prices. A physician loan allows you to enter the market when it aligns with your career timeline, not when a savings target is met.
When a Larger Down Payment Might Make Sense
While 0–10% is attractive, there are situations where putting more down is beneficial:
- You want a lower monthly payment
- You’re purchasing an expensive property
- You prefer conservative leverage
- You want better interest rate options
- You plan to stay long-term
A higher down payment reduces loan size, interest paid over time, and overall risk. The right balance depends on your income stability, savings, and comfort level with debt.
Factors Lenders Evaluate Beyond Down Payment
Even with flexible physician programs, lenders still assess:
- Credit score
- Debt-to-income ratio
- Employment contract
- Specialty and income trajectory
- Cash reserves
Strong credit and a signed employment agreement often allow approval before your first attending paycheck. Residents and fellows may also qualify with future income considered.
This makes home buying possible earlier than many physicians expect.
The Psychological Side of Down Payments
Money decisions are not purely mathematical. Some buyers feel more comfortable putting a larger down payment simply for peace of mind. Others prioritize liquidity and growth.
There is no universally correct answer.
The best choice is the one aligned with:
- Your career stage
- Risk tolerance
- Family needs
- Investment strategy
- Long-term housing plans
A home purchase should support your life, not create unnecessary financial stress.
Final Thoughts: What Should Physicians Expect?
For most physicians, a realistic down payment expectation falls within the 0–10% range, especially when using a physician mortgage program. These loans exist specifically to recognize your earning potential and reduce barriers to homeownership.
The key is not just how little you can put down but how your decision fits into your broader financial strategy.
Before committing, consider speaking with:
- A lender experienced with physician loans
- A financial advisor familiar with medical professionals
- A real estate agent who understands relocation and physician timelines
The right guidance ensures you’re not just buying a home, you’re building a strong financial foundation.