Personal protection
Mortgage protection: keep the keys, even if income stops.
Mortgage protection covers your loan repayments if you can’t work due to illness, injury, or redundancy. For most NZ households, the mortgage is the biggest monthly outgoing. and the one that, if it stops being paid, ends the household.
Who it’s for
This page is for you if…
- First-home buyers and recent homeowners with a fresh mortgage
- Single-income or one-and-a-half-income households
- Self-employed homeowners with no employer redundancy cover
- Anyone whose mortgage is more than 30% of household income
What it does
How the cover actually works.
- Monthly benefit covering mortgage repayments. typically up to a cap of your repayment amount or a percentage of income
- Triggered by illness, injury, and (on some policies) involuntary redundancy
- Wait and benefit period chosen at the start. same structure as income protection
- Sits alongside life and TPD cover to make sure the home survives the household
NZ context
What you should know about this in New Zealand.
Bank-sold mortgage cover often shrinks with the loan
Some lender-sold policies reduce the sum insured as your loan amortises. That’s logical for the bank but often inflexible for clients who refinance, top up, or move.
Redundancy cover is rare
Most income-protection products don’t cover redundancy. A small number of NZ mortgage-protection policies do. useful in an economic downturn, but check the wording.
Stand-alone vs. embedded
You can buy mortgage protection as a stand-alone product, or use a portion of income protection sized to your mortgage. We compare both. the right answer depends on your job stability and other cover.
Common myths
Three things we hear that aren’t quite right.
“The bank’s mortgage cover is the cheapest.”
Often, yes. but cheapest isn’t always best. Lender cover is built around the bank’s interest, not yours. Stand-alone cover follows you between banks.
“Income protection already does this.”
Sometimes. A well-sized income protection plan can cover the mortgage and more. But income protection doesn’t cover redundancy, and the offset clauses are different.
What an adviser does
Why this is hard to do on your own.
- Decide whether you need standalone mortgage protection or just well-sized income protection.
- Compare redundancy cover availability and definitions across NZ insurers.
- Make the cover portable. so it follows you between banks and refinances.
- Size to the actual mortgage plus rates, insurance, and a small living cushion.