Current Rate Environment for Physician Mortgages
Physician mortgage rates in 2026 continue to follow a pattern distinct from conventional lending. Because these are portfolio loans held on bank balance sheets rather than sold to Fannie Mae or Freddie Mac, rates are influenced by different factors — including the bank's appetite for physician relationships, their deposit targets, and competitive pressure from other physician-focused lenders.
As a general benchmark, physician mortgage fixed rates currently run approximately 0.125% to 0.50% above comparable conventional rates. A 30-year fixed physician mortgage in early 2026 typically falls in the mid-6% to low-7% range depending on LTV, FICO score, and loan amount. Adjustable-rate physician mortgages (ARMs) often price 0.50% to 1.00% below fixed rates, making them particularly attractive for borrowers with shorter time horizons.
It is important to understand that physician mortgage rates are not published on rate sheets the way conventional rates are. Every lender prices these loans differently based on their internal cost of funds, and rates can vary by 0.50% or more between lenders on the exact same borrower profile. This is precisely why comparison shopping matters more for physician mortgages than for any other loan type.
Fixed vs ARM: When Each Makes Sense for Doctors
The fixed-rate vs adjustable-rate decision is one of the most consequential choices a physician borrower will make. Unlike conventional lending where the choice is relatively straightforward, physician mortgages present unique scenarios where ARMs can provide substantial savings with manageable risk.
When an ARM Makes Sense
Residents buying their first home with plans to move in 3–5 years are the ideal ARM candidates. If you are a PGY-2 purchasing near your training program and know you will relocate for your attending position, a 5/6 or 7/6 ARM saves real money. The initial rate is lower, and you will likely sell or refinance before the first adjustment. On a $500,000 loan, the rate difference between a 5/6 ARM and a 30-year fixed can save $200 to $400 per month during the fixed period — that is $12,000 to $24,000 over five years.
When a Fixed Rate Makes Sense
Attendings settling into a long-term home should strongly favor the 30-year fixed. If you have finished training, accepted a position you plan to stay in, and are buying the home where you will raise your family, locking in a fixed payment eliminates all interest rate risk. The premium you pay over an ARM buys certainty — your principal and interest payment will never change regardless of what happens to the economy or interest rates over the next three decades.
See how ARM vs fixed affects your monthly payment
Use the Physician Mortgage Calculator →What Factors Affect Your Physician Mortgage Rate
Four primary factors determine the rate a lender will offer you. Understanding each one gives you leverage to negotiate and position yourself for the best terms available.
FICO Score Impact
Credit score is the single largest rate driver. Physician mortgage programs require a minimum 680 FICO score, but the rate differences across tiers are significant. A borrower with a 760 FICO will typically receive a rate 0.25% to 0.50% lower than a borrower at 700, and 0.50% to 0.75% lower than someone at 680. On a $500,000 loan, that 0.50% difference translates to roughly $170 per month or over $60,000 in total interest over 30 years.
Loan-to-Value (LTV) Impact
Higher LTV means higher rates. A 100% LTV (zero down) physician mortgage typically carries a rate 0.125% to 0.375% higher than the same loan at 90% LTV. Putting 10% down not only reduces your loan amount but also unlocks a better rate tier — a double benefit that many borrowers overlook.
Note that physician mortgage programs require a minimum LTV of 90.01%. Borrowers who want to put down more than approximately 10% should consider conventional loans, which may offer better rates at lower LTV ratios.
Loan Amount Impact
Many physician mortgage programs have rate tiers based on loan size. Loans above $1 million may carry a small rate premium (0.125% to 0.25%) compared to loans in the $300,000 to $750,000 range. Conversely, some lenders offer slightly better pricing on larger loans to win the relationship.
Property Type
Single-family detached homes generally receive the best rates. Warrantable condos typically price the same, but some lenders add a small premium (0.125%) for condominiums. Townhomes are generally treated the same as single-family residences.
Rate Tiers by FICO Score
The following table illustrates typical rate adjustments based on credit score tiers. These are representative spreads, not specific lender quotes — actual rates vary by lender and market conditions.
| FICO Range | Rate Adjustment | Typical Impact on $500K Loan | Qualification Notes |
|---|---|---|---|
| 760+ | Best available rate | Baseline monthly payment | Top tier — best pricing across all lenders |
| 740–759 | +0.125% | +$42/month | Still excellent pricing; minimal premium |
| 720–739 | +0.125–0.25% | +$42–$84/month | Most common tier for physician borrowers |
| 700–719 | +0.25–0.375% | +$84–$126/month | Standard minimum for most programs |
| 680–699 | +0.50–0.75% | +$168–$252/month | Program minimum; 95% max LTV above $1.5M, 100% LTV available up to $1.5M |
ARM Structures Explained
Physician mortgage ARMs follow specific structures that determine how your rate can change after the initial fixed period. Understanding these structures is critical for making an informed decision.
5/6 ARM (2/1/5 Caps)
The 5/6 ARM provides a fixed rate for the first 5 years, then adjusts every 6 months. The cap structure of 2/1/5 means: the first adjustment can increase your rate by a maximum of 2% above the initial rate, each subsequent adjustment is capped at 1%, and the lifetime cap is 5% above your starting rate. If your initial rate is 5.75%, the worst case at first adjustment is 7.75%, and the absolute maximum rate over the life of the loan is 10.75%.
7/6 ARM (5/1/5 Caps)
The 7/6 ARM holds your rate fixed for 7 years, then adjusts every 6 months. The 5/1/5 cap structure provides a wider first adjustment window (up to 5% at first adjustment), but the 7-year fixed period gives you more runway. This is a strong choice for fellows or early attendings who may relocate within a decade but want more certainty than a 5-year product provides.
10/6 ARM (5/1/5 Caps)
The 10/6 ARM offers a full decade of fixed-rate stability before any adjustments. With the same 5/1/5 cap structure as the 7/6, this product bridges the gap between a true ARM and a 30-year fixed. The rate premium over a 5/6 ARM is usually 0.25% to 0.50%, but still meaningfully less than a 30-year fixed.
How the Index and Margin Work
After the fixed period, your adjusted rate equals the index plus the margin. Most physician mortgage ARMs use the SOFR (Secured Overnight Financing Rate) index with a typical margin of 3.5%. If SOFR is at 4.0% when your ARM adjusts, your new rate would be 7.5% (4.0% + 3.5%), subject to the cap structure. The margin is fixed for the life of the loan — it never changes.
ARM Qualifying Rate Rules
When you apply for a physician mortgage ARM, lenders do not qualify you at the initial note rate. They use a higher qualifying rate to ensure you can afford potential payment increases. Understanding these rules helps you anticipate your maximum approval amount.
- 5/6 ARM: You qualify at the greater of the fully indexed rate (index + margin) or the note rate plus 2%. If your note rate is 5.75% and the fully indexed rate is 7.50%, you qualify at 7.75% (5.75% + 2%), since that exceeds the fully indexed rate.
- 7/6 and 10/6 ARM: You qualify at the greater of the fully indexed rate or the note rate (no additional cushion). Because these longer fixed periods carry less near-term risk, lenders allow qualification at the note rate when it exceeds the fully indexed rate.
This means 7/6 and 10/6 ARMs often allow higher loan amounts than 5/6 ARMs, even though their initial rates are slightly higher. The qualifying rate difference can mean $50,000 to $100,000 more in purchasing power.
Important ARM requirements: All ARM products require a minimum loan amount of $350,000. DTI limits are reduced to 45% for any ARM product and 15-year fixed loans (compared to 50% for 20/25/30-year fixed with LTV ≤95%). The 45% limit also applies when LTV exceeds 95%, regardless of product type. The overall loan range for physician mortgages is $100,000 to $2,000,000.
Model different ARM scenarios with real numbers
Try the Physician Mortgage Calculator →How to Lock the Best Rate
Rate locking strategy can save or cost you thousands of dollars. Here is how to approach it strategically.
Timing Your Lock
Most physician mortgage rate locks are available for 30, 45, or 60 days. Longer lock periods typically cost a small premium (0.125% for a 60-day lock vs 30-day). The optimal strategy is to lock as soon as you have a ratified purchase contract and have selected your lender. Waiting to "time the market" is speculation, not strategy — rates are just as likely to move against you as in your favor.
Float-Down Options
Some lenders offer float-down provisions that allow you to capture a lower rate if market rates drop after you lock. These typically require rates to fall by at least 0.25% to 0.375% before the float-down triggers. Ask your loan officer specifically about float-down terms before you lock — not all physician mortgage programs include this feature, and the terms vary significantly between lenders.
Rate Buydowns
Paying discount points (prepaid interest) to buy down your rate is an option with most physician mortgage programs. One point (1% of the loan amount) typically reduces your rate by 0.25%. On a $500,000 loan, that is $5,000 upfront to save approximately $84 per month. The break-even period is roughly 5 years, making buydowns most attractive for borrowers who plan to hold the loan long-term.
Points and Fees: What to Expect
Physician mortgages carry origination costs similar to conventional loans, but there are nuances worth understanding.
- Origination fee: Typically 0% to 1% of the loan amount. Many physician-focused lenders waive origination fees entirely to win the relationship.
- Discount points: Optional prepaid interest to reduce your rate. Each point costs 1% of the loan amount and typically buys a 0.25% rate reduction.
- Third-party fees: Appraisal ($500–$800), title insurance, recording fees, and escrow deposits are comparable to any mortgage transaction.
- No PMI: Unlike conventional loans below 80% LTV, physician mortgages never charge PMI — this is a significant ongoing cost savings, not a fee.
How to Evaluate Paying Points
The decision to pay points is a math problem with one key variable: how long you will keep the loan. Divide the cost of the point(s) by the monthly savings to find your break-even month. If you plan to keep the loan beyond that break-even point, paying points saves money. If you expect to sell or refinance sooner, keep your cash.
The Resident Rate Strategy
The most cost-effective approach for residents purchasing a home follows a two-phase strategy that takes advantage of the physician mortgage ARM during training and transitions to a fixed rate when attending income begins.
- Phase 1 — ARM during residency: Purchase with a 5/6 or 7/6 ARM at the lowest available rate. The initial fixed period covers your remaining training years. Monthly savings versus a 30-year fixed accumulate throughout residency, preserving cash during your lowest-earning years.
- Phase 2 — Refinance when attending salary begins: Once you are earning your full attending income and have established 1–2 years of pay history, refinance to a 30-year fixed conventional loan. By this point, home appreciation and principal payments during training have built equity, potentially putting you above the 20% LTV threshold needed for conventional lending without PMI.
This strategy captures the ARM's lower rate during the exact period you can least afford higher payments, then locks in long-term certainty once your financial position is strongest. The typical savings during the ARM phase range from $12,000 to $30,000 depending on loan size and rate differential.
Ready to find your best physician mortgage rate?