A GP finishing their fellowship or a dentist opening their first practice in the Camden or Campbelltown corridor faces a specific financial challenge: years of training mean limited time to accumulate a deposit, but an income that will quickly outpace most of their peers. Lenders know this. The medico loan - a category of home loan policy rather than a distinct product - exists precisely to bridge this gap, allowing eligible health professionals to borrow at 90% or sometimes 95% LVR without paying Lenders Mortgage Insurance.
Why Lenders Offer This
The waiver of LMI for health professionals is not altruism. Lenders have decades of default data, and health professionals - doctors, dentists, pharmacists, and their peers - sit at the lowest end of the default risk spectrum of any borrower cohort. They have stable, typically growing incomes. Their employment or practice tenure is long. They are, from a lender's perspective, precisely the kind of long-term, high-value client worth acquiring at a preferential cost.
The LMI waiver is the acquisition cost. A standard borrower paying LMI on an $800,000 loan at 90% LVR would typically pay between $15,000 and $20,000 in LMI premium - either upfront or capitalised into the loan. Waiving this for a doctor who will likely refinance, invest, and accumulate property over the next three decades is a calculated commercial decision by the lender, not a concession.
Real dollar saving
On an $800,000 purchase with a 10% deposit ($80,000), the LMI premium for a standard borrower is typically $15,000 to $20,000 depending on the lender. An eligible doctor borrowing the same amount pays zero. That saving goes directly toward furnishing the home, an offset account, or reducing the loan principal.
Which Professions Qualify
The eligible professions vary by lender, and checking the full panel is the only reliable way to confirm. As a general guide, most medico policies extend to:
- Medical practitioners - GPs, specialists, surgeons, anaesthetists, radiologists
- Dentists and dental specialists (orthodontists, periodontists, oral surgeons)
- Pharmacists
- Optometrists
- Veterinarians
Some lenders extend their policies to physiotherapists, chiropractors, and podiatrists, though LVR limits for these professions may be capped at 90% rather than 95%. Nurses, midwives, and allied health practitioners in other fields typically do not qualify under standard medico policies, though specialist lenders sometimes have broader criteria.
LVR Limits and What You Still Need
The most common medico policy allows borrowing up to 90% LVR with no LMI for eligible health professionals. Some lenders extend this to 95% specifically for medical practitioners - meaning a doctor can, in principle, purchase a property with a 5% deposit and no LMI charge, though 5% deposit borrowing at any LVR warrants careful cash flow planning.
What you still need regardless of profession: genuine savings history (most lenders require at least 5% of the purchase price held for three months), AHPRA registration or equivalent professional registration, and income evidence. For salaried doctors - hospital employees, junior medical officers - payslips and an employment contract suffice. For practice owners and GPs with business structures, two years of tax returns and financial statements are standard.
Newly Qualified Doctors and Registrars
One of the more nuanced aspects of medico lending is how income is assessed for doctors in their intern, residency, or registrar years. Standard loan assessment uses current income. Some lenders - particularly those with dedicated medico desks - will consider projected income for a doctor who is completing their training and moving into a consultancy or practice role within six to twelve months.
This is not automatic. It requires documentation - a letter of engagement from a practice, confirmation of impending fellowship completion, or evidence of a signed employment contract at the higher income level. A broker who has placed medico clients before will know which lenders are receptive to this approach and how to structure the supporting documentation.
The Catch: Product Selection and Rate
Medico loan policies are not available across the entire market. A borrower walking into their local branch of a lender that does not have a medico policy will simply be assessed as a standard borrower and charged LMI. Access to the full lender panel - which a mortgage broker provides - is necessary to compare which lender offers the best combination of waived LMI, competitive rate, and product features.
Some lenders price their medico products at the same rate as their standard range. Others apply a small premium of 0.10% to 0.20% above their advertised rate. At $700,000 borrowing, 0.20% is $1,400 per year - which still compares favourably to a $15,000 LMI charge over the likely holding period. The comparison needs to be done on total cost, not headline rate.
SW Sydney context
GPs and specialists working in the Campbelltown Hospital, Camden Hospital, and Liverpool Hospital corridors are among the most active borrowers in this category across south-west Sydney. The Macarthur region's housing prices still sit within a range that makes medico LVR waivers particularly practical - unlike in parts of the northern beaches or eastern suburbs where even a 90% LVR can represent a very large absolute loan amount.
Frequently Asked Questions
I'm a nurse - do I qualify for a medico loan?
Most standard medico loan policies do not extend to registered nurses. The LMI waiver policies offered by major lenders are typically limited to medical practitioners, dentists, pharmacists, optometrists, and veterinarians - professions with AHPRA registration and a specific income profile. Some specialist lenders have broader lists, so it is worth having a broker check the full panel rather than assuming the answer is no.
I'm a locum or contractor doctor - can I still get a medico loan?
Yes, but income assessment is more complex. Lenders who offer medico policies will generally accept locum income, but they want to see a two-year track record of contracting in the same specialty, and they will average your income over that period rather than using your peak year. Some lenders will accept a shorter history if you are a recent graduate transitioning from residency to locum work. A letter from your medical recruiter confirming expected engagements can also support the application.
Do medico loans have higher interest rates?
Often a small premium applies - typically 0.10% to 0.25% above standard rates - though some lenders price medico products identically to their standard range. At $800,000 borrowing, 0.20% is $1,600 per year. Compare that to the $15,000 to $20,000 LMI saving and in most cases the medico policy wins clearly on total cost over any reasonable holding period. The comparison should always be run on the full cost, not just the headline rate.
Eligible for a medico loan?
Michael works with health professionals across south-west Sydney to structure their home finance correctly. Check your eligibility in a free 30-minute call.
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