Medico home loans, also known as medico loans, are special home loans reserved for medical professionals.
That includes doctors, surgeons, nurses, dentists, vets, psychiatrists, physiotherapists, chiropractors, optometrists, ophthalmologists, pharmacists, radiographers, midwives, and others.
What makes medico loans special is they tend to have more generous borrowing conditions (which vary from lender to lender) compared to regular home loans. Depending on the lender, medicos may be able to:
Qualify for lower interest rates and fees
Lenders tend to charge lower interest rates (sometimes as much as 1 percentage point lower) and fees for medico home loans than regular home loans.
Take out larger loans
A medical professional applying for a medico loan would probably be approved for a larger loan amount than a regular borrower with an otherwise identical financial profile applying for a regular home loan with the same lender.
Have smaller deposits
For regular customers, it can be tricky to qualify for a loan with less than a 20% deposit. But medical professionals are given more leeway, and may be approved for a medico loan with a 5% or even 0% deposit.
Gain access to LMI waivers
With regular home loans, borrowers generally have to pay lender’s mortgage insurance (LMI) if they put down less than a 20% deposit. But with medico loans, medical professionals are generally exempt from LMI if they provide a 10% or 5% deposit – or even, in some cases, a 0% deposit.
Receive special loan features
Some medico loans include offset accounts and redraw facilities for fixed-rate loans, which are not available with regular home loans.
Get faster loan assessments
Lenders will often process medico loan applications faster than regular home loan applications.
Secure more flexible repayment terms
With some medico loans, you may be able to temporarily switch from principal-and-interest repayments to interest-only.
Why do medical professionals get special treatment?
Lenders prefer borrowers who have higher incomes (because they’re likely to take out more loans, and larger loans, during their life) and lower risk profiles (because they’re more likely to repay their loans). Medical professionals tick both boxes.
Compared to an average worker, medicos:
Have more secure jobs
Earn higher incomes
Have more reliable income streams
