Advanced Mortgage Solutions, a Christchurch-based advisory firm, has reported an increase in homeowner inquiries about mortgage protection insurance, as clients seek ways to manage financial exposure tied to their housing debt.
The firm attributed the uptick to growing awareness of income risk in the face of economic uncertainty and regional property fluctuations.
Mortgage protection insurance provides cover for borrowers who may be unable to meet their mortgage obligations due to illness, injury, or death.
Advanced Mortgage Solutions explained that unlike broader life or income protection products, mortgage protection insurance policies are tied specifically to home loan repayment structures. Depending on the product, the insurance may cover monthly payments, clear the outstanding balance, or pay out a fixed lump sum.
According to advisers at the firm, homeowners are reassessing how a sudden disruption to income would affect their ability to retain ownership of their properties.
“With economic uncertainty and rising living costs, homeowners are realising the importance of planning for the unexpected. The right cover can be the difference between staying in your home or being forced to sell during a crisis,” they said.
The shift in consumer interest comes as residential property values show signs of limited recovery.
In the latest QV House Price Index, the average home value across New Zealand rose slightly to $913,772 for the quarter ending May 2025. This represents a 0.1% quarterly increase, although values remain down 1.1% on the same period last year and have fallen 14.1% since the late 2021 market peak.
Some regions, including Whangārei, Hastings, Nelson, and Christchurch, experienced quarterly gains of over 1%. Other areas, such as Auckland and Wellington, continued to post declines, although at a slower rate than earlier in the cycle. In Hamilton and Tauranga, changes were minor.
QV operations manager James Wilson observed a cautious return of buyer interest, particularly in regional and lower-priced markets.
Insurers are increasingly factoring in regional and environmental risks when pricing property cover.
In Dunedin, areas prone to flooding are experiencing reduced demand, in part due to higher premiums and availability constraints.
Elevated locations, in contrast, are seeing stronger interest from buyers.
Local QV valuer Baylan Connolly said insurance costs are becoming a key component of buyer decision-making, particularly in areas exposed to severe weather events.
Insurers are adapting to these changes by adjusting underwriting practices to better reflect geographic risk and climate resilience. This includes close monitoring of rebuild costs and increased reinsurance charges that continue to affect premium levels across the sector.
Market projections from GlobalData suggest the general insurance sector in New Zealand will grow at an annualised rate of 8.3% through 2029. Property insurance is expected to account for over 42% of total gross written premiums by 2025, with a 10.6% increase forecast for that year.
This growth trajectory is being driven by continued claims inflation, higher input costs for repairs and construction, and an uptick in climate-related losses. Between 2022 and 2024, the property insurance loss ratio rose from 69.1% to 96%, reflecting elevated claims and cost pressures.
As these trends continue, mortgage protection insurance is likely to remain a relevant tool for borrowers seeking to stabilise their financial commitments amid uncertainty.
