Should You Buy a House as a Resident Physician? Why Renting Often Wins in Today’s Market

For some resident physicians, buying a home during residency can feel like a rite of passage. You’re finally earning a paycheck, building your adult life and dreaming of a place that’s all your own. But just because you can qualify for a 0% down resident mortgage doesn’t mean buying is the best financial move while you’re still in training.

Whether it’s smart to buy a house as a resident physician depends on many factors, including how long you’ll realistically stay put and what mortgage rates and home prices look like when you’re ready to buy. Keep reading to learn why, for most residents, renting beats buying in today’s market.

Can you buy a house as a resident physician? Technically, yes.

Most residents can qualify for a mortgage, even with limited savings and significant student debt, thanks to physician mortgage programs. These types of loans exist specifically for early-career physicians and are one of the few financial perks you get during training.

Physician mortgages typically allow for no down payment with no private mortgage insurance (PMI) requirement. Additionally, they don’t fully factor in your student loan balance if you’re on an income-driven repayment (IDR) plan, making it easier to qualify. They also tend to come with higher loan limits than conventional mortgages.

However, the very features that make physician mortgages appealing to residents can also make them a double-edged sword.

When your salary is capped and you’re staring down a potential move in three years, the math starts to matter a lot more than the freedom to paint your walls. This is where many residents get burned in the rent versus buy debate, particularly in today’s 7%+ interest rate climate.

Should you buy the house you want during residency?

Here’s the core dilemma: buying during residency locks you into a location before your medical career has truly begun. If the best attending job opens up a couple of hours away, are you willing to turn it down (or endure a brutal commute) just to avoid the cost and hassle of selling a home you just bought?

Prioritizing a house over career flexibility can quickly backfire when you’re still figuring out what kind of attending life you want or where you’ll build it.

Take this example: a physician family buys a home strategically located between two hospital systems, assuming it’s the ideal midpoint. Not long after moving in, one of the hospitals unexpectedly shuts down its program, instantly altering future job prospects.

So yes, you can buy a house during residency. But if flexibility matters (and it should), then buying might not be worth the trade-off, especially given the current interest rate environment.

Scenario: Buying a $500,000 house as a resident

Let’s say you and your spouse earn a combined $120,000, which includes $70,000 from your residency and $50,000 from your spouse’s job. You buy a $500,000 home with a 0% down physician loan at 7% interest. Your mortgage payment (principal and interest) would be about $3,327 per month.

But that’s just the starting point. You also have to add in other unavoidable homeownership expenses such as:

• Property taxes: Generally 1% of the home’s market value.
• Homeowner’s insurance: Typical costs range from $1,000 to $5,000 per year.
• Maintenance costs: Budget 1% to 2% of the home’s purchase price.

For this scenario, that adds $5,000 in property taxes, $2,500 for homeowner’s insurance and $5,000 in maintenance expenses (if we stick to 1%) annually. That brings your total housing cost to about $4,368 per month.

If a comparable home rents for $3,500 per month, you’re paying an extra $868 per month just to own. That doesn’t include upfront closing costs (generally 3%) or the risk of needing to move before you break even.

This is often the case in mid-sized markets like Knoxville, Tennessee, where a 3,000-square-foot home might rent for $3,500 but sell for $700,000. On the surface, the monthly cost looks similar. But once you factor in homeownership expenses (e.g., property taxes, insurance and maintenance), renting often turns out to be the better deal.

Scenario: Buying during residency when rent is high

Let’s say rent for the same home is $4,500 per month. At that point, buying starts to look better, potentially saving you almost $19,000 over three years. Assuming 3% annual home appreciation, the home could be worth about $546,000 after completing your residency. In which case, you might walk away with roughly $8,900 in cash after factoring in selling costs (generally 7%) and paying off your loan.

The math works out in favor of buying a house as a resident physician in this scenario. But only in cases where rent is a lot higher compared to your total housing cost and you plan to stay for at least three years (preferably longer).

Keep in mind that it’s not typical for rent to outpace the full monthly cost of a 7% interest rate mortgage. Which is why, in most markets, renting remains the better option during residency given today’s climate.

What if mortgage rates drop?

If interest rates dropped to 3% or 4% again, the math changes significantly. Lower rates reduce your monthly mortgage by hundreds of dollars, possibly tipping the balance toward buying. But only if you plan to stay in the home long enough. 

What’s the break-even point for buying a house during residency?

If you know for a fact that you’ll stay in the same metro area post-residency and plan to work nearby as an attending, the math might start to lean in favor of buying. But if you’re planning to cast a wide net in your job search or you’re in a specialty that might require relocating for a fellowship or your ideal role, buying can quickly become a burden.

The fewer years you live in a home, the harder it is to justify the upfront costs and risk exposure for young residents.

For example, let’s say you can rent a home for $3,500 a month or buy an equivalent home with a total monthly housing cost of $4,368. Over three years, you could invest that $868 per month difference and end up with over $30,000 versus only $8,900 after selling. 

Now, if you lived in the same home for seven to ten years, buying would eventually make more sense. The home would appreciate, and you’d pay less interest over time. But three years isn’t likely going to be long enough, and even four years is borderline. By five years, the numbers start to break even in this scenario. However, that’s longer than most residents will remain in the area.

So, buying could make sense if you’re staying put after training. Otherwise, the typical residency timeline falls short of what’s needed to make buying worthwhile.

Buying vs. renting: How much flexibility do you want?

Deciding between renting versus buying isn’t just a math problem: it’s also about lifestyle choices. Owning a home can tie you down in ways that renting doesn’t. That can be a good thing, or it could limit your options when you need to make a quick move for a new job, fellowship or just a better quality of life.

With renting, you can:

• Preserve job and relocation flexibility.
• Avoid large upfront cash needs and closing costs.
• Skip the hassle of major repairs and on-going maintenance concerns.
• Move if the neighborhood changes or your commute doubles.
• Reevaluate your living situation more easily as your needs, budget or family size change.

If you buy and suddenly need to relocate, you may have to sell at a loss or take on the role of long-distance landlord — neither of which is ideal during 50- to 80-hour weeks.

Buying during residency requires more than just loan approval

Buying a home during residency isn’t off limits, but it should be a well-reasoned decision based on your unique situation. If you’re staying in the same city long-term, rent is sky-high and you’ve run the numbers with a realistic timeline and budget, buying might make sense.

But for most resident physicians, renting allows for flexibility, reduces financial risk and gives your career room to grow. It’s hard to overstate the value of being able to pick up and go when the right attending job or fellowship opportunity comes along. And let’s be honest: there’s something to be said for having a landlord to call when the water heater dies the night before your 24-hour shift.

Not sure what makes the most sense for your situation? Use our rent vs. buy calculator to crunch the numbers and see which option fits your residency or fellowship plans better.