Mortgages: How Much Can A Dentist Borrow Realistically? with Sarah Grace [CPD Available]

UK Dentists: Collect your verifiable CPD for this episode here >>> https://courses.dentistswhoinvest.com/smart-money-members-club

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Ready to turn confusing mortgage rules into clear action steps? We sit down with specialist broker Sarah Gris to unpack how dentists can borrow more at better rates by aligning income evidence, deposits, and monthly commitments with what lenders actually reward.

We start with the real levers behind the famous “multiplier.” Five times income is common, six times is realistic with the right profile, and seven times appears in niche cases at a price. Sarah explains how associates and principals should present figures: salary plus dividends or profit after corporation tax for limited companies, and net profit for sole traders. We dig into why lenders often average two years, how to time applications to showcase a strong latest year, and when projection-based pay schedules can help growing clinicians.

Then we get tactical about affordability killers. A 0 percent credit card still counts, with lenders modelling around three percent of the balance as a monthly outgoing. That £10,000 you plan to clear “later” can shave roughly £80,000 off potential borrowing today. We highlight the heavy hitters—car finance, school fees, nursery costs—and translate them into mortgage impact, including how a £2,200 car payment can crowd out around a £400,000 mortgage. The message is simple: lenders view you like a business, so strip out avoidable commitments before you apply.

You’ll also learn how banks estimate day-to-day spend using ONS benchmarks, why flats bring service charges and ground rent into the equation, and which bank statement entries trigger underwriter questions. Sarah shares pragmatic fixes: clear or restructure revolving debt, build a stronger deposit for better rates, tidy statement references, and coordinate application timing with your best filed accounts. For dentists who like to stretch, this is the map for stretching smart.

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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.

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Episode Transcript

Dr James (01:43):
Dentists want to know how much they can borrow, but
they don't want all this mumblejumble small print.
They just want the headlinesexplained to them.
And that's why I'm joined todayby expert mortgage broker to
dentist, Ms Sarah Grace.
We're gonna be delving into theheadlines of what dentists need
to know whenever it comes todeciding how can we get the best
mortgage and how can we get thelowest interest rate and hence

(02:04):
lowest repayments.
Looking forward to thisepisode.
As ever, you can claim your CPDfor this episode within the
official Dentists Who InvestSmart Money Members Club.
Smart Money Members Club alsoincludes multiple mini courses
and webinar series on financefor dentists, including how to
become as tax efficient aspossible, as well as
understanding investing.
All of this content counts asverifiable CPD, and you can

(02:26):
download your certificates thereand then upon completion of
each lesson.
In addition to this, we alsoinclude a whopping 10% discount
on your dental indemnity and a5% discount on lab bills for
dental principals, amongst otherperks and discounts for
members.
Please use the link in thedescription to claim your
verifiable CPD for this episode.
Alright, well this podcast isgoing to be exactly what it says

(02:52):
in the 10.
It's going to be a punchy andimpactful podcast, Sarah.
And we were talking about thisoff camera, weren't we?
About the most common questionsyou get asked when it comes to
dentists and the affordabilityfor their mortgages.
So if we can just make onepiece of content that just goes
bang and deals with all of them,I think that's going to be
super useful.

(03:12):
So we narrowed this down tothree, the three most common
ones.
And number one was themultiplier.

Sarah (03:19):
Multiplier, yeah.
Hi, James.
Hi.
Hi.
Yeah.

Dr James (03:23):
Yeah, you'll you'll you'll be able to describe it
better than me, the multiplierfor the uh being able to figure
out how much they can borrow,right?

Sarah (03:29):
Yeah, so I would say that typically, you know, majority
of dentists can probably getabout five times income.
It does depend on deposit.
So, you know, if you're ifyou're earning less than 50,000
a year with a 10% deposit, youknow, five times is is going to
be more of a stretch thansomebody earning 100k with a

(03:50):
with a 20% deposit.
Um, so I would say speak toyour mortgage broker and and
they will they will look at thatfor you.
But five times is fairlycommonplace.
We can get up to six times.
There are a few lenders thatare doing seven times, but then
you're not going to be gettingas good a rate.

(04:11):
So me uh I like to call myselfthe rate heart, um, always
looking for the best deals foruh clients.
And so, you know, six timesincome, you can still get a
really good lender with a reallygood rate.
Um, so that is possible.
However, you know, that's sixtimes your income.

(04:33):
So that can be profit aftercorporation tax plus your
salary.
If you're limited sole trader,you know, it's your tax return
um net profit.
Um and and typically it's theaverage over the last two years.
So if you've had them latestyear being really high, well,

(04:55):
they will average the last twoyears, so just be mindful of
that.
Um pay schedules is always anoption though, anyway, so we can
get around that.

Dr James (05:05):
Nice.
Um and you said there was a bitof a range there.
Is that just dependent on thebroker?
Or would the range be slightlyhard depending on the case?
And there were certainvariables within the case.

Sarah (05:18):
Uh that yes, sometimes there is certain variables like
you need to be earning over ahundred K per annum, um, or the
application needs to have over ahundred K.
Um, but I would say you know,speak to speak to a broker.
Um if you're not getting thethe answer that you want, speak

(05:40):
to me and I'll I'll confirmwhether you can.
Because um that's one thingthat I always find with
dentists, you uh always want tostretch yourselves.
Um they like to have the thelarger large houses and um you
know stretch themselves as muchas as possible and uh probably

(06:00):
quite bullish with theirattitude to risk.

Dr James (06:05):
Well, you know, it's uh it's it's an interesting one,
isn't it?
You've you've observed thatwith Dennis.

Sarah (06:09):
I guess they like to, how can I say this, enjoy the
spoils of all their hard work isis is maybe Yeah, and I think
that possibly a lot of dentists,you know, uh principals or
aspiring principals.
So, you know, you you tend tofind that entrepreneurs have a
higher risk threshold.
Um, you know, I do do the oldmortgage for medics, uh employee

(06:31):
GPs and that sort of thing, andthey're they're ultra cautious
in comparison.

Dr James (06:37):
You know, it's interesting, and not to go on
too much of a tangent, but Ithink that their profession
trains them to be that way alittle bit more than us.
Uh because it's all about justavoidance of doubt, right?
And that is uh yes, we dentistsdo that as well as clinicians.
Uh however, we're rewardedwhenever it comes to running our
practice by rolling the dice alittle bit more.
So it kind of shapes us.

(06:59):
It's like a chicken and an egg.
Were we like that and thendentistry happened?
Or did dentistry happen andthen it made us like that?
I don't know.
I don't know the answer.
It's an interesting one toponder.
Uh, but yes, anywho, moving on.
Number two.
Number two was debt and howit's treated uh by the lenders,
specifically credit card debt,because a lot of people have
this.

Sarah (07:18):
Yes, a lot of people have credit card debt.
So um one of the one of theclassic uh answers that I'm
given when I ask if they've gotcredit card debt is yes, I've
got 10k on a credit card, butit's not percent.
So almost like so you don'tneed to take it into account.
Lenders will, because lenderswill assume that once your zero

(07:41):
percent deal ends in 12 monthstime or how whenever um that
that that you will still havethat 10 grand's worth of debt.
So typically they take apayment of 3% off your
affordability.
So on 10 grand, um, you know,300 quid a month is what they'll

(08:06):
take off your affordability,uh, because they'll assume that
you're going to have that 10grand worth of credit card debt.

Dr James (08:13):
Yeah, and given that pr that's per month, that's I
guess that's quite a lot,really.

Sarah (08:18):
Well, if you think about it, a three 300k mortgage is is
a 300 pounds payment on amortgage is is probably about
80,000 pounds worth ofborrowing.

Dr James (08:30):
There you go.
Okay, right.
So it's it's it's something weneed to be aware of.
And just just Sarah, obviously,because you're having these
conversations and keepingeverything fully anonymized, of
course.
If you had to lick your fingerand put it in the air, right,
because this is an interestingquestion to ask, right?
If you had to lick your fingerand put it in the air, whenever
you're reviewing each and everycase for their, I guess,
affordability for a mortgage,what percentage of the time do

(08:53):
people have credit card debtthat they haven't paid off at
the end of every that theyhaven't squared up at the end of
the month?
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Sarah (10:55):
I've read an article saying that teachers are
probably the worst professionfor having uh sort of loans and
credit cards because I thinkthey get marketed a lot by um
different uh financialinstitutions with teacher deals.
Um but dentists are uh prettygood, but I have I have um, you

(11:17):
know, I have had people, I thinkmy worst I've seen is 180k on
uh on credit card debts.
So yeah.

Dr James (11:26):
Let's hope it was an Amex and they got some air miles
on that or something at thevery at the very least or some
good amount of it.

Sarah (11:32):
Yeah, dentists love the uh Amex air miles, don't they?

Dr James (11:36):
Yeah, I've got it's they they do.
We're we're like like we'relike magpies for those credit
card deals, aren't we?
Uh but yeah, you know, just tonot to not to labor the point,
but if you had to lick yourfinger in the air and put a
percentage on it, maybe 10% ofthe time, 20% of the time.
I'm just really I'm justcurious.

Sarah (11:52):
Um yeah, I would say possibly 20% of the time people
do have a credit card.
And when I say credit carddebt, if you if you uh pay a
direct debit and clear thebalance every month, that's not
classed as a credit card debt.
Yeah, it's only it's only whenyou at you know you if you don't
clear your statement at the endof each month.

Dr James (12:14):
But but isn't that interesting, right?
20% is still one in five,right?
And you know, you're just we'renot we're not holding you to
that, right?
It's anecdotal, right?
But you actually get to seethis a lot of the time.
20% is still one in five, andfrom what you're saying is
relatively speaking, that'scomparably good to other
professions.
Isn't that interesting?

Sarah (12:33):
I I think it is, yeah.
And like, you know, but August25 they they said that there was
76 billion outstanding oncredit cards uh in the UK.
So they said that the averagehousehold has about two and a
half K worth of credit carddebt.

Dr James (12:52):
Dang.
And in America, I'm gonna guessthat's a lot more.

Sarah (12:55):
But Oh, I think it's gone over a trillion in the US.

Dr James (12:59):
Yeah, I and I'd I'd be interested to know per
household as well.
Uh, I know we we won't havethose stats per hand, but I bet
I bet it's worse than over herebecause their debt is just so
normalized to them.
Like it's normal to just useyour credit card to uh purchase
depreciating assets like carsand everything along those
lines.
And I do often say that tomyself, I'm looking up my
window, and there's people, lotsof people really nice cars, and

(13:21):
I'm like, who are all thesepeople that are minted enough to
afford that and you know have adecent lifestyle as well?
And there's just something notquite stacking up there, you
know, the money's coming fromsomewhere.
Anyway, not to go down, not tonot to digress too much, but
yes, anyway, yes, numero numerothree, uh, that is we were
talking about this off camera.

(13:42):
This is cars, car finance, carrepayments, and how they
interact, I guess, withmortgage.

Sarah (13:49):
So so whether you've got uh you know you know HP rent
agreement or a car loan, youknow there there are some lumpy
payments.
I think two thousand twohundred was the most that I saw
on a car payment each month.
They they they will you knowtwo thousand two hundred is is

(14:12):
equivalent to probably about afour hundred K mortgage if you
if you think about it.
So that that they can that canreally affect your
affordability.

Dr James (14:24):
Yeah.

Sarah (14:24):
But school fees is another big one as well.
You know, a lot of people arepaying school fees or nursery,
nursery costs.

Dr James (14:32):
Um Well, do you know what I like when you said off
off camera, right?
It's like when they when thebank you said this before, and
you might have said it oncamera, but just to reiterate
it, because I think it's ahelpful way of looking at this,
these sorts of situations.
The banks basically can look atyou like you're a business and
they look at your profitability,right?
So what happens, right?

(14:53):
You get your if you're adentist and you're
self-employed, right?
You get your your turnovereffectively paid into your bank
account, right?
Some dentists call that yourgross, some call it your net.
It depends on how you look atit.
It's your net after yourassociate split, but it's your
gross taxes, right?
Just to clear that one up,right?
Yeah, that goes into your bankaccount, tax comes out of it,

(15:15):
all these other things we'vejust talked about come out of
it, and then after that, that'syour profit, yeah.
And that is what they use toassess your affordability,
right, Sarah?
Yes.

Sarah (15:25):
Yeah, yeah.
So it's your income less yourexpenditure, and that and that's
what you're so you know,somebody earning a hundred
thousand with no outgoingswhatsoever, other than your
normal utilities and and thatsort of thing.
They should be able to borrow,in theory, than somebody earning

(15:46):
a hundred thousand with twochildren, they've got school
fees, they've got a car payment,and they've got a credit card
balance, which they don't cleareach month.
You know, they they don't haveas much liquid cash every month
than the hundred K with no withno commitments.

Dr James (16:04):
For sure, for sure.
And do they write do they getright down as granular as how
much you spend on your food shopand stuff like that?
No, they don't.

Sarah (16:12):
There was a bit when when this all sort of came in with
MMR, when was that?
Oh 2017, I think it was, um,when they were sort of uh the
press were saying, Oh, you know,they they're gonna banks are
gonna start asking me how manytimes I have filled sake a week
and and whatever.
They they don't.
What a lot of lenders will uhuse the Office of National

(16:37):
Statistics data for yourpostcodal area, so they will
know four bedroomed house,typically in that area, how much
your utility bills are going tobe, and so they'll just apply
the the ONS data.

Dr James (16:52):
Right.
So they they basically look atthe major expenses, but it's not
super granular.
Um so it'll be all things wementioned plus some ONS data in
there somewhere, but it's a bittoo.

Sarah (17:05):
But d don't forget that if you're buying a flat, you're
going to have a service chargeand ground rent.
That cost will also be takeninto account.

Dr James (17:15):
Interesting to know and very valuable.
Any other ones?
I mean I'm actually intrigued.

Sarah (17:20):
Um those are the biggies.
Some lenders ask if you've gotmuch in the way of travel costs
commuting to work.
Um but but and and you know,lenders will look through your
bank statements.
So if you've got a paymentgoing to mum and dad two hundred

(17:42):
pounds a month with a referenceloan repayment.
Um lenders will ask questionsabout that, so just make sure
that what you've got isn't onyour bank statements.