Written by · Reviewed by Smiths Insurance & KiwiSaver — licensed Financial Advice Provider (FSP712931) · Last updated 2026-10-20

Mortgage protection insurance in NZ: how to compare

There is no single best mortgage protection insurance in New Zealand, and no insurer we found sells a product by that name. The term usually means mortgage repayment cover: a monthly benefit towards your repayments if illness or injury stops you working. Options differ on how cover is sized, waiting periods, early-period limits and who is paid.

In short

Compared: Fidelity Life, Partners Life, Chubb Life, Asteron Life and AIA mortgage repayment cover, on sizing, waiting and payment options, redundancy and who is paid, as at 20 October 2026, from each insurer's published documents. Not every NZ insurer is included. This is one adviser's reading, not a score.

Mortgage repayment cover is a policy that pays a monthly amount towards your mortgage or rent payments if sickness or injury stops you working, usually after a waiting period you choose and for a payment term you choose, such as 2 years, 5 years or to age 65 or 70. Several insurers sell it through licensed advisers. The benefit is sized to the repayment rather than to your whole income. It does not pay a lump sum, it does not clear the loan balance when you die, and it pays for sickness or injury, not job loss, unless the policy adds that. The decision is what you want the money to do: keep the repayments current while you recover, or leave your family a sum if you die.

A person working a mechanical adding machine beside a small model house

"Mortgage insurance" can mean three things

Searchers use "mortgage insurance" for three different things, and only one protects your ability to keep paying.

Name people use What it insures Can your lender require it?
Mortgage repayment cover (what this page is about) Your ability to keep paying if illness or injury stops you working No law we found requires it
House insurance The building that secures the loan A lender can require insurance to protect the secured property (MBIE: Responsible Lending Code)
Low equity margin (NZ banks) Nothing for you: it is an extra interest charge on loans above 80% of the property's value It is a loan term, not insurance

ASB says a Low Equity Margin, an extra charge on top of the interest rate, can apply "when you borrow more than 80% of your property's value" (ASB). That is a charge on your loan, not a policy that protects you. Pinnacle Life sold a standalone Mortgage Insurance product until it was withdrawn from sale in November 2020; existing policyholders keep their cover (Pinnacle Life).

How much cover? The published sizing rules

Insurers publish different bases, so the same household can be allowed different amounts. Fidelity Life's guide lists the basis of cover as "either or": 115% of the monthly mortgage repayment, 115% of rent, or 45% of income (Fidelity Life underwriting guide, October 2025). Chubb Life says cover can be set at "up to 115 per cent of your monthly rent or mortgage payments" or "45 per cent of your annual income" (Chubb Life), and AIA's page gives "up to 115% of your rental payments or mortgage repayments" or "45% of your gross income" (AIA). Partners Life allows the greater of 45% of pre-tax income (even with no mortgage) or your actual repayments, from $100 to $40,000 a month, with any amount above $30,000 limited to a 2-year payment term (Partners Life fact sheet, information correct at 15 March 2025).

A worked example, with made-up household figures: a repayment of $3,200 a month and gross income of $8,500 a month.

Basis Calculation Cover allowed
Fidelity Life, repayment basis 115% of $3,200 $3,680 a month
Fidelity Life, Chubb Life or AIA, income basis 45% of $8,500 $3,825 a month
Partners Life Greater of 45% of $8,500 or $3,200 $3,825 a month

None of these documents tells you to take the lower of the two: Fidelity Life describes the two bases as alternatives, and Partners Life takes the greater. These are the insurers' limits, not what you should buy. Your own number depends on your budget, savings, sick leave and whether a partner's income could carry the loan. Our mortgage protection calculator works on a different question: it compares your falling mortgage balance with a $300,000 guaranteed acceptance limit and sizes the repayment gap at today's rate and a stressed rate. It does not apply an insurer's 115% or 45% limit, so use the table above for those.

If cover is based on your actual mortgage debt, Partners Life requires mortgage details at application; if it is based on income, proof of income is needed at application or at claim time. The sheet also lists increases without new health assessment when debt or rates rise: an increase in mortgage debt or a restructure (the lesser of the actual increase or $1,500 a month), and a rise of at least 1% in the OCR within 12 months (the lesser of the actual increase or $1,500), all before age 55. Fidelity Life requires at least 25 hours of work a week, or 20 on a case-by-case basis for permanent part-time employment, to be considered.

The options side by side

Insurer and product Sizing it publishes Waiting and payment options it publishes
Fidelity Life: Monthly Mortgage Repayment Cover 115% of repayment or rent, or 45% of income Not read; see the adviser factsheet
Partners Life: Mortgage Repayment Cover Greater of 45% of pre-tax income or actual repayments Waits of 4, 8, 13, 26, 52 or 104 weeks; payment terms of 3, 6 or 12 months, 2 or 5 years, or to 65 or 70; entry 16 to 57 for a term to 65, 16 to 62 for a term to 70
Chubb Life: Mortgage Repayment Cover Up to 115% of repayment or rent, or 45% of annual income Waiting not listed on the page; the wait is waived if a disability returns within 12 months
Asteron Life: Mortgage & Living Insurance "Agreed level of cover"; no percentage on the page Optional "Immediate assist" package pays while a claim is awaited
AIA: Mortgage, Income or Rent Cover Up to 115% of rent or mortgage repayments, or 45% of gross income Waits of 4, 8, 13, 26, 52 or 104 weeks; benefit periods of 2 or 5 years, or to 65 (70 for selected occupations); eligible ages 16 to 55 (60 if in a managerial position); redundancy cover (up to six months of payments) is an optional add-on

Sources: the documents linked above, plus Asteron Life: Mortgage & Living Insurance and AIA: Mortgage, Income or Rent Cover, AIA details read on 20 October 2026. "Not read" means we did not open that document on 20 October 2026, not that the insurer does not publish it. Partners Life's sheet is written for advisers but is publicly hosted, so read it as a description of features, not a promise of terms.

Five questions that separate the options

Price is only one of the things that separates policies, and we have no published price to show. These five questions come first.

  1. What event pays? Repayment cover pays for sickness or injury that stops you working. Life insurance pays on death. Job loss is separate: AIA offers redundancy cover only as an optional add-on, Partners Life's sheet is titled "Mortgage Repayment Cover without Redundancy" (which implies a version with redundancy exists; we have not read its terms), and the Chubb Life and Asteron Life product pages we read do not mention it. See redundancy insurance in NZ.
  2. How is the benefit sized and can it change? Check the sizing basis, indexing and whether it rises if your debt or rates do.
  3. How long is the wait and the payment term? A longer waiting period leaves a bigger gap that savings, sick leave or ACC (for an accident) must fund. Partners Life limits an occupation class 5 benefit to $2,500 a month.
  4. What is excluded or restricted at the start? Partners Life excludes self-inflicted harm, criminal activity, non-compliance with medical treatment, and a normal pregnancy, childbirth or miscarriage unless the disability continues 90 days after it ends. Check what happens to a condition you already have; do not assume cover.
  5. Who sells it and who is paid? An adviser can approach several insurers. Cover sold with a loan may pay the lender: the Banking Ombudsman Scheme describes loan protection policies as paying the lender, not the insured or their estate (Banking Ombudsman Scheme, read from an archived copy on 19 August 2026).

Bank-tied cover, adviser-arranged cover and guaranteed acceptance

Sold with the loan Adviser-arranged repayment cover Quick Life (guaranteed acceptance life cover)
Event that pays Check the policy Illness or injury stopping work Death, terminal illness
Who is paid Possibly the lender The insured person The owner or beneficiary
Health questions Check the policy Underwritten; financial evidence needed None
Early-period limit Check the policy Check exclusions and what is listed for your health First 2 years: pre-existing conditions and suicide excluded
Covers redundancy Check the policy Only if the policy adds it No

Guaranteed acceptance cover does not replace repayment cover. Momentum's Quick Life is life cover: it pays on death or terminal illness, takes New Zealanders aged 18 to 65 without health questions, and starts at $50,000 to $300,000 per person, indexed at 3% a year to age 75 or a $500,000 cap per person (Momentum Life: Quick Life Insurance Policy Wording, November 2025). It does not pay if illness stops you working, and the 2-year exclusion for pre-existing conditions and suicide in the table applies (premiums are refunded if a pre-existing-condition death in the first 24 months leaves no claim payable). It can sit beside repayment cover for someone who wants some lump sum without health questions. A $300,000 start will not clear a large mortgage on its own, and a healthy person can usually get more cover for less with fully underwritten cover through an adviser. See life insurance versus mortgage protection and the Quick Life plan page.

Two borrowers

On a joint loan each earner is a separate life to insure, and the repayment is shared between two incomes. Questions for an adviser: should each borrower hold repayment cover, how should the repayment be split between them, and what happens to the other person's cover if one claims. Quick Life's joint cover is per person: the benefit is paid for the person who dies and the other stays covered, so covering both partners does not double the sum on one death.

Tax and ACC, briefly

Repayment cover is income-style cover, so IRD's guidance on income protection is the relevant starting point: it says those payouts are generally taxable because they replace lost income (IRD: Insurance payouts). Insurers' own tax statements may differ, so ask the insurer and check with IRD; our life insurance versus mortgage protection page sets the two views side by side. Illness is outside ACC; for an accident, ACC compensation is up to 80% of earnings (ACC: Injuries we don't cover, retrieved 9 September 2026).

Can you get an online quote?

Not for repayment cover, in our reading. We found no insurer price list for it, and QuoteHub's Premium Index excludes it. The online quote the Momentum buttons on this page open is for Quick Life, which is life cover. For repayment cover, a licensed adviser can request quotes. Have these ready: mortgage balance and monthly repayment, gross income and how you are paid, hours worked, existing insurance, and sick leave and savings.

Momentum Life Limited has a financial strength rating of B (Fair) from A.M. Best, affirmed 11 February 2026, and B sits in A.M. Best's "vulnerable" range. A rating is an opinion, not a recommendation; see Momentum's financial strength page. Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). This page is general information, not advice. QuoteHub is a Momentum Life partner, and Smiths Insurance & KiwiSaver may receive a commission if you buy through our link; see how we are paid and our disclosure. Written by the QuoteHub Editorial Team (AI-assisted) and reviewed by the QuoteHub Adviser Team. Last reviewed 20 October 2026.

Frequently asked questions

How long is the waiting period?

You choose it. AIA and Partners Life each list waits of 4, 8, 13, 26, 52 or 104 weeks. AIA says a longer wait typically lowers the cost, but it leaves a bigger gap for savings, sick leave or ACC to fill; see mortgage life insurance explained if you were looking for the death-benefit product instead.

Does mortgage repayment cover pay off the mortgage?

No. It pays a monthly benefit towards repayments while you cannot work, up to the insurer's limit. It does not repay the principal.

Does it cover redundancy?

Not unless the policy says so. Check the wording and see redundancy insurance in NZ.

Will premiums rise over time?

Partners Life lists yearly stepped premiums and level premiums to 65 or 70 that are "non-guaranteed". See stepped versus level premiums.

Should I buy income protection instead?

Income protection is sized to your income, not just your repayment. Compare both in mortgage protection versus income protection.

References

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