TD Bank prescribes mortgages to debt-burdened medical students

With the launch of its Medical Professional Mortgage Product, TD Bank is leveraging an opportunity to attract new customers and to address what it says is a knowledge gap among this group of professionals.

Less than one in five medical students are aware of mortgage offerings for their field, and nearly a quarter of those who are in practice claim student debt made buying a house more challenging, according to TD Bank.

The bank's new product, available to physicians, dentists, fellows and third-year students, offers the ability to secure 100% financing with a maximum loan amount of $750,000 and does not require private mortgage insurance. Applicants wanting to borrow up to $1.25 million will only make a 5% down payment.

TD Bank's Medical Professional Mortgage Product is available in both fixed- and adjustable-rate options. Flexible debt-to income ratios are also accepted, depending on income, according to the bank.

The product "alleviates some of the biggest challenges those in the medical field face following graduation and residency, such as large amounts of debt and a lack of earning history," Rick Bechtel, TD Bank's head of residential lending, said in a press release.

Student debt overall has been delaying millennial homeownership by about a decade, according to the National Association of Realtors and American Student Assistance.

The move by TD Bank to tap the health care market highlights a trend of mortgage institutions creating specialized programs for professional groups like doctors, community workers and law enforcement.

Similarly, TransPecos Banks in Pecos, Texas, built a specialty product called BankMD, a digital platform for physicians. While it is not itself a mortgage product, it speaks to the trend that institutions seek to provide value to particular niche audiences, and joins TD Bank in targeting medical professionals.