Physician loans · Side by side
Physician Loan vs. Conventional Loan in Seattle: The Numbers Side by Side
A physician loan saves cash up front. A conventional loan often costs less each month. Here is how the two compare at two Seattle prices, using the latest national rate average and the 2026 King County loan limit.
The main guide covers how the loan types compare in general. This page runs the math and explains when each loan tends to come out ahead. Every figure is an illustration, not an offer. Real quotes from lenders on the same day decide it.
At a glance
- CashThe physician loan needs the least: $0 down on a $900,000 home, versus $45,000 at 5% and $180,000 at 20%.
- Monthly costConventional with 20% down is lowest. Physician vs. 5% down conventional is close, and depends on the PMI quote and the physician rate premium.
- Mortgage insuranceOn a conventional loan, PMI can be cancelled on request at 80% of the original value and ends automatically at 78%, on schedule.
- Jumbo lineAny loan above $1,063,750 in King County in 2026 is a jumbo loan.
- The rulePrice both loans on the same day, for the same home price.
By Brian Huie, Principal Broker and Realtor, Compass · Figures as of November 2026
The inputs
Each number comes from a published source or is labeled as an assumption.
- Rate: 7.24%. Freddie Mac's average 30-year fixed rate for the week of October 29, 2026. It reflects conforming loans with 20% down and good to excellent credit, so 5% down and jumbo loans can price differently.
- Physician rate: 7.49%, an assumption. No one publishes an average physician loan rate. For illustration only, this page adds 0.25 percentage point to the Freddie Mac average.
- Loan limit: $1,063,750. FHFA's 2026 one-unit conforming limit for King County. Above it, a loan is jumbo.
- PMI: $30 to $70 a month per $100,000 borrowed. Freddie Mac's published range. The real figure depends on credit score and down payment.
- Physician tiers. BMO and Truist published 0% down on loans up to $1 million and 5% down up to $1.5 million as of November 2026. Above $1 million, this page uses 5% down.
Payments are principal and interest only, plus PMI where it applies. Property tax, homeowners insurance and any HOA dues come on top, and so do closing costs. "Cash at closing" below means the down payment alone.
The numbers at two Seattle prices
All options are 30-year fixed loans.
| Loan | Down payment | Loan amount | Principal and interest | PMI | Total monthly | Jumbo |
|---|---|---|---|---|---|---|
| Physician, 0% down, 7.49% (assumed) | $0 | $900,000 | $6,287 | None | $6,287 | No |
| Conventional, 5% down, 7.24% | $45,000 | $855,000 | $5,827 | $256 to $598 | $6,083 to $6,425 | No |
| Conventional, 20% down, 7.24% | $180,000 | $720,000 | $4,907 | None | $4,907 | No |
| Loan | Down payment | Loan amount | Principal and interest | PMI | Total monthly | Jumbo |
|---|---|---|---|---|---|---|
| Physician, 5% down, 7.49% (assumed) | $62,500 | $1,187,500 | $8,295 | None | $8,295 | Yes |
| Conventional, 5% down, 7.24% | $62,500 | $1,187,500 | $8,093 | $356 to $831 | $8,449 to $8,924 | Yes |
| Conventional, 20% down, 7.24% | $250,000 | $1,000,000 | $6,815 | None | $6,815 | No |
Illustrations, not offers. Physician rate is the Freddie Mac average plus an assumed 0.25 point. The 5% down conventional loan at $1,250,000 is a jumbo loan, which many lenders don't offer at 5% down and which prices differently from the conforming average; it is shown only for comparison. Closing costs, taxes and insurance are extra.
Two things stand out. At $900,000, the physician loan and the 5% down conventional loan land within a few hundred dollars a month of each other, and which one is lower depends on the PMI quote. At $1,250,000, the physician loan asks for the same 5% down, so its main edge becomes skipping PMI on a jumbo-size loan. Keeping that purchase under the conforming limit would take $186,250 down, about 14.9%.
When each loan tends to win
The physician loan
- Cash is the limit. Keeping $45,000 to $180,000 in savings for reserves, repairs or high-interest debt can matter more than a lower payment.
- The loan is large. Above the conforming limit, a physician loan with 5% down and no PMI can beat a jumbo conventional loan that wants 10% to 20% down.
- Qualifying is the problem. Student loans or a job that hasn't started can block a conventional approval. The main guide covers how student loans count and closing before the start date.
The conventional loan
- 20% is available. In both examples, 20% down costs about $1,380 to $1,480 a month less than the physician loan, before counting what that cash could earn elsewhere.
- The PMI quote is low. With strong credit, 5% down conventional can match or beat the physician loan's payment, as the $900,000 example shows.
- The plan is to stay. PMI eventually comes off a conventional loan. The physician loan's higher rate, if it has one, stays until a refinance or sale.
Equity grows slowly at first. On schedule and with no change in price, the $900,000 physician loan builds about 5% equity in five years, so a buyer who sells early has little cushion for selling costs. The guide's risks section covers this.
In his own files, conventional loans have come out ahead more often than buyers expect. Brian tells those stories in his own words on his journal: What I've Learned Writing Offers With Physician Loans.
How PMI comes off a conventional loan
Under the Homeowners Protection Act, as the CFPB explains it, PMI on a conventional loan for a primary home has three exits.
- Request at 80%. The borrower can ask in writing to cancel PMI when the balance is scheduled to reach 80% of the original value, or sooner with extra payments. It takes a good payment history, no second mortgage, and sometimes proof the home hasn't lost value.
- Automatic at 78%. The servicer must end PMI when the balance is scheduled to reach 78% of the original value, if payments are current.
- Midpoint. PMI ends the month after the loan's halfway point, 15 years on a 30-year loan, even if 78% hasn't been reached.
"Original value" is generally the lower of the purchase price or the appraisal. At 7.24% with 5% down and regular payments only, the 80% mark arrives after about 11 years and the 78% mark after about 12. On the $900,000 example, that is roughly $37,000 to $86,000 of PMI before it ends on its own. Extra principal payments shorten it, and investor rules can allow earlier cancellation, so ask the lender. For how physician programs avoid PMI in the first place, see mortgage insurance in the main guide.
Rate premiums and adjustable rates
The physician loan's cost hinges on how much higher its rate is than a comparable conventional loan, if at all. Lenders don't publish it, and it changes daily.
On a $900,000 loan near 7.24%, each 0.25 point of rate is about $153 a month. In this example, the physician loan stays cheaper than 5% down conventional only if its premium is under about 0.47 point with a high PMI quote, and it loses at any premium with a low PMI quote.
Many physician loans are adjustable-rate mortgages with a fixed period of several years. A lower ARM starting rate can narrow or reverse the gap above, but the payment can rise after the fixed period. Compare the fixed and adjustable quotes side by side, and check the highest payment the ARM allows.
How Brian has clients request and compare these quotes is in the client section of Brian's buyer's guide.
Questions about the comparison
Is a physician loan cheaper than a conventional loan?
Not usually on a monthly basis when the buyer can put 20% down. Against 5% down conventional it is close, and the result depends on the PMI quote and the physician rate premium on the day both loans are priced.
How much higher is a physician loan rate?
It varies by lender and by day, and no average is published. This page assumes 0.25 percentage point for illustration only. Some quotes come in higher, and some programs lower the rate for a bank relationship.
When does PMI come off a conventional loan?
A borrower can request cancellation when the balance is scheduled to reach 80% of the original value, and it ends automatically at 78% if payments are current. With 5% down at 7.24%, that is about 11 to 12 years on schedule, sooner with extra payments.
Is a $1.25 million home a jumbo loan in King County?
It is unless the down payment is at least $186,250. The 2026 one-unit conforming limit in King County is $1,063,750, and any loan above it is jumbo.
Do these payments include property tax and insurance?
No. They show principal and interest, plus PMI where it applies. Property tax, homeowners insurance, any HOA dues and closing costs are extra.
Should a doctor with 20% saved still use a physician loan?
Sometimes, if keeping the cash for reserves or other debt matters more than the lower payment. Otherwise 20% down conventional usually costs less each month. Price both on the same day.
Next steps
The full picture lives in the main guide: who qualifies, how the terms work and how physician loans compare. When it is time to talk through a specific purchase, Brian is a quick call away.
- The physician loan guide
- Brian's buyer's guide, including the physician loan section for clients
- How Brian helps buyers
This page is general information, not a loan offer or financial advice. Brian Huie is a real estate broker, not a lender, and Brian is not paid by any lender. Confirm loan terms with a licensed loan officer. Figures as of November 2026.
Sources
- Rates: Freddie Mac PMMS, week of October 29, 2026, About PMMS
- Loan limits: FHFA 2026 county loan limits, FHFA 2026 announcement
- Mortgage insurance: Freddie Mac, Breaking down PMI, CFPB on removing PMI
- Physician tiers: BMO, Truist