Buying your first home is exciting — and expensive. Insurance is probably the last thing you want to think about. But this is exactly the moment when getting the right cover matters most: you've just taken on the biggest debt of your life, and your financial safety net is thinner than ever.
The four types of cover to think about
When you buy your first home, four types of insurance become relevant:
- Home insurance — Covers the building itself. Your lender will require this as a condition of your mortgage.
- Contents insurance — Covers your belongings inside the home.
- Life insurance — Ensures your partner or family can keep the house if you die.
- Income protection — Replaces your income if you can't work due to illness or injury.
Rank them by priority: Home insurance is mandatory. Life insurance is critical if you have a partner or dependants. Contents insurance is strongly recommended. Income protection is the one most people skip but arguably need most.
The mortgage protection trap
Your bank will likely offer "mortgage protection insurance" when you sign your home loan. Before you sign up, understand what it actually is:
- Decreasing cover — The payout shrinks as your mortgage shrinks. After 10 years of paying your mortgage down, you have significantly less cover.
- May only cover accidental death — Some bank products don't cover death from illness, which is far more common.
- Can be more expensive long-term — Compared to standalone life insurance from a specialist insurer.
Bank mortgage protection isn't bad — it's just usually not the best option. Our recommendation: take the bank's product to get immediate cover, but within your first 6 months of homeownership, get a comparison quote from an independent adviser. You'll almost certainly find better cover for less money.
💡 Good to know
You can cancel bank mortgage protection at any time (usually with 30 days' notice). So there's no risk in starting with it while you sort out a better alternative. Just make sure your new policy is confirmed before you cancel the old one.
How much life cover do first-home buyers need?
At minimum: enough to pay off the mortgage so the surviving partner isn't forced to sell the home. If you have or are planning children, add income replacement on top.
Example: $550,000 mortgage + $200,000 income replacement buffer = $750,000 minimum.
Remember, life insurance is cheapest when you're young and healthy — locking in cover now saves significant money over your lifetime. A 30-year-old will pay a fraction of what a 45-year-old pays for the same cover.
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Contents insurance — yes, even in your first home
Your first home might not have expensive art or antiques, but add up everything you own: bed, couch, TV, laptop, phones, kitchen appliances, clothing, bicycles... it's probably $50,000 to $100,000+ worth of stuff.
Contents insurance for homeowners is affordable — typically $30 to $50 per month depending on the value and your excess. Get it from day one.
💡 Good to know
Take photos or video of every room in your house for your records. If you ever need to make a claim, having visual proof of your belongings makes the process dramatically easier. Store the images in the cloud so they're safe even if your phone is damaged.
Just bought your first home?
Check what cover you need — free 2-minute check →Income protection — the one most first-home buyers skip
This is arguably the most important cover for first-home buyers, yet it's the one most people don't get. Here's why it matters:
- You're more likely to be unable to work for 3+ months than you are to die during your working life.
- If you can't work, your mortgage payments don't stop.
- ACC only covers accidents, not illness — and illness is the more common cause of extended absence from work.
- You probably don't have enough savings to cover months of mortgage payments with no income.
Even basic income protection — with a longer waiting period to keep costs down — provides a critical safety net. For a 30-year-old earning $70,000, basic income protection might cost $50 to $80 per month.
A realistic first-home buyer budget
For a couple, both aged 30, with a $550,000 mortgage:
- Home insurance: $1,500–$2,500 per year (required by your lender)
- Contents insurance: $30–$50 per month
- Life insurance ($600K each): $50–$80 per month each
- Income protection: $60–$100 per month each
Total: roughly $350–$550 per month for comprehensive protection.
That's real money when you've just stretched for a mortgage — but compare it to the financial devastation of being uninsured when something goes wrong. A house fire with no contents insurance. A cancer diagnosis with no income protection. A death with no life cover and a $550,000 mortgage outstanding.
What to do right now
A practical timeline for first-home buyers:
- Before settlement: Arrange home insurance (required by your lender)
- On move-in day: Get contents insurance in place
- Within the first month: Get at least basic life cover sorted — even the bank's product as a stop-gap
- Within 3 months: Research income protection and get quotes
- At 6 months: Review everything once you've settled in. Compare bank mortgage protection against standalone options. Adjust cover levels if needed.
Our free insurance check can help you figure out what you need and connect you with an independent adviser at no cost.