Dentists can use medical professional mortgage programs too, and in some ways your file is more interesting than a physician's. Associate pay, practice loans and dental school debt all change how a lender sees you.
When I sit down with a new dentist, the conversation is rarely just about the house. It is about your associate agreement, whether you plan to own a practice one day and how much of your student line of credit is still there. Get those three things right and the mortgage usually falls into place.
Yes, dentist mortgage programs exist in Canada
A lot of dentists assume physician mortgage programs are only for doctors. They are not. Eligibility is set lender by lender, and several include dentists. RFA's medical professional program, for example, lists dentists who are in their last year or have recently completed their program, alongside physicians, optometrists, chiropractors and veterinarians. Scotiabank also runs a projected income program for the dental field.
What these programs give you is the ability to qualify before you have a long income history, which is exactly where most new dentists are.
Can a final year dental student get a mortgage?
With some lenders, yes. Programs like RFA's include dentists in their final year or recently graduated. Others want to see you working first. Your graduation date and your start date decide which lenders are open to you, so this is a timing conversation as much as a mortgage conversation.
How lenders see dental associate income
This is the question I spend the most time on with dentists. Most associates are paid a percentage of billings as independent contractors, and most lenders treat that like self employment income.
In your first years, a medical professional program can still work well, because it is designed for people without a long track record. Once you are established, lenders usually go to your tax returns, and the business expenses you deduct can lower the income they see. That is not a reason to change how you file, but it is a reason to plan your purchase with both your accountant and your mortgage professional in the room.
If you are about to sign an associate agreement, I am happy to look at how a lender would read it before you sign.
Buying a dental practice and a home in the same year
It can be done, but the order matters. A practice loan adds to your debt, and some lenders count it heavily against a home mortgage. When I know both purchases are coming, I plan them together so we use lenders that understand practice financing and your home approval is not squeezed by the practice loan.
What projected income will a lender use for a dentist?
I am careful with numbers here. Projected incomes for new dentists vary widely between lenders, and the published figures do not always agree. Rather than quote you one number that may not apply to you, I confirm the current amount with each lender for your situation and timing.
Down payment and mortgage insurance for dentists
Canada's minimum down payment is 5% of the first $500,000 and 10% of the portion above that, up to $1.5 million. Every mortgage with less than 20% down must be insured. With Canada Guaranty's medical program, the premium at 5% down is 4.00% of the loan when the down payment is your own money or a gift, and it is usually added to the mortgage. You still qualify at the higher of your contract rate plus 2% or 5.25%.
A First Home Savings Account lets you contribute $8,000 a year up to $40,000, and the RRSP Home Buyers' Plan lets you withdraw up to $60,000. Both can go toward the same home.
Your dental school line of credit
Dental school debt is real, and lenders count a monthly payment for your line of credit. They do not all calculate it the same way. Some use your balance and others use your full limit, so the lender you choose can change your approval more than any single number in your file. You can see the difference in the affordability calculator.
What to bring to our first conversation
- Your degree, or proof of final year enrolment
- Your licence or registration status
- Your associate agreement or employment contract, and how you are paid
- Your student line of credit statement and any other debts
- Proof of your down payment, including any gift
- Details of any practice loan, if you own or are buying in
My advice for new dentists
Plan your home and your career together. If owning a practice is on your horizon, tell me now, even if it is years away, because it changes which lender makes sense today. You can read more on my mortgages for dentists and vets page.
When you are ready, tell me where you are in your career and I will compare dentist friendly programs across the banks and lenders that only work through brokers.
