Do doctors get a higher LVR on commercial property loans?

General practitioners, medical specialists, surgeons, dentists and dental specialists are on almost every medico list. Veterinarians, pharmacists, optometrists and chiropractors are on many. Physiotherapists, psychologists, podiatrists and other allied health professionals are on some. Nurses, paramedics and practice managers are rarely included. Lenders also require the borrower to be registered with AHPRA or the relevant body and, at most lenders, to be a member of a recognised professional association. The list is set by each lender and changes.

For owner-occupied practice premises, lenders under medico policy commonly go to 80 per cent LVR without additional security, and a handful will lend 100 per cent of the purchase price plus costs for established practitioners with strong practice income, sometimes with the practice goodwill or cash flow supporting the excess. Terms can run to 25 or 30 years rather than the 15 to 20 typical of commercial lending, and interest rates sit closer to residential than to commercial pricing. Deposits can come from equity in a home the lender also holds.

Investment commercial property that is not your practice is generally assessed as ordinary commercial lending at 65 to 75 per cent, because the medico policy is about your income, not the asset. Specialised medical property such as day surgeries and imaging centres is assessed on the asset. And the policy does not remove serviceability: the practice financials or salary still have to support the loan.

Because the policies differ, the same doctor can be offered 80 per cent at one bank and 100 per cent at another for the same rooms. A specialist who works with medical borrowers will know which lender is running the strongest medico terms at the time and how they treat a new practice versus an established one, a sole practitioner versus a partnership, and rooms bought personally versus through a company or SMSF.