Why a Mortgage Isn’t Always the Best Move for Doctors, Nurses and Healthcare Workers

We all know life in healthcare can be unpredictable. Don't underestimate the potential headache and financial impact of starting a mortgage and owning a home when life's opportunities arise. Imagine getting that dream job 💼 offer in another city, or your training programme has allocated you to rotate to another hospital placement. Owning a home could complicate things. Remember, renting keeps you flexible! Are you considering buying but worried about future opportunities?

I have worked with countless foundation year doctors, registrars in training posts, even locum consultants, who have committed to mortgages before even thinking about where their long term jobs are going to based! Most of them, end up paying for a mortgage and end up having to rent somewhere else for their rotations on top of that. Imagine the percentage of monthly pay they are pouring into their living cost. How can one contribute to their money nest egg like this?!

You need to deeply understand your situation first. Whether you're a doctor, nurse, pharmacist or physiotherapist, financial independence isn't far-fetched. Invest early and wisely; the right time for you might not look like everyone else's. Even if your non-medical friends seems like they are getting a mortgage and 'settling down', following that decision may not be sensible for you when you crunch the numbers. Don't overlook the earning potential and financial benefit of short term renting and investing the rest!

As a general rule, don't commit to a mortgage unless you are living there for at least the next decade (10 years). When people look at buying a property, the most common pitfall is forgetting the add-on costs like stamp duty, lawyer fees, surveyor costs, estate agent fees... the list goes on. I will be publishing a separate blog on why a mortgage may not be a wise choice for everyone, even if they can afford it.

When you buy a house 🏠 and start a mortgage, the entire house/flat becomes your liability. It is your financial obligation to maintain the property's upkeep 🛠. There are technically no upper limits to how much you have to commit to fixing problems with the property. However, with renting, the rent itself is the maximum amount you would have to cover for. Any upkeep for the property is the landlords problem and responsibility!

If you are not financially secure and have not secured your permanent job yet, don't feel pressured into BUYING a property and dump yourself with a massive mortgage.

At Money First Aider, I look heavily into asset allocation and how we can optimise it. Money pouring into a mortgage, may have an invisible opportunity cost 💸 in terms of loss of investment earnings of your money nest egg and ultimately delaying your date till true financial freedom!

Disclaimer

All content provided on this platform is intended for informational, educational and entertainment purposes only, and should not be construed as strict financial advice. The information presented does not constitute a recommendation to buy or sell any specific security, investment product, or service. Investing involves risk, including the potential loss of principal (money). It is important to conduct thorough research or consult with a qualified financial advisor before making any investment decisions.