Homeownership and Protection - Time to reconnect the dots

For many New Zealanders, owning a home represents stability and long-term security. It’s a goal most of us work hard for and do our best to protect. But the financial landscape is shifting. Mortgage costs have risen, household budgets have tightened, and more families are carrying risks they may not fully recognise. 

One of those risks doesn’t always get the attention it deserves. What happens to the mortgage if the main income earner can no longer contribute? 

The quiet shift in protection 

Life insurance used to be part of the mortgage conversation. It was never about pressure - just good planning. But as the shape of the industry has changed, that connection has faded. Fewer borrowers are prompted to think about protection at the right time, and many aren’t aware of how vulnerable they might be. 

Today, that conversation rarely happens. And without it, many families take on long-term debt without a safety net. 

A challenge worth addressing 

The issue isn’t new, but the signals are becoming more visible. Mortgage arrears are up. As of March 2025, there were about 24,000 residential mortgage accounts past due, representing an arrears rate of 1.58 %—this is the highest home loan arrears level since at least 2017 and marks a 7 % year on year increase.    

There’s no suggestion that lenders are doing anything wrong. The system simply hasn’t been set up to factor in this kind of future scenario. But maybe it’s time we start doing so. 

Technology can help close the gap 

Traditional life insurance models haven’t made it easy. Separate processes, complex paperwork and long lead times have often made it feel disconnected from the lending experience.  

But we now have the tools to change that. We’ve seen how an efficient PAS can support insurers in making protection feel like a natural part of the mortgage journey, not something bolted on later. 

Rather than reinventing the product, it’s about delivering the product in a more affective way. With the right admin backbone, insurers can design and manage protection in ways that are timely, tailored and far easier to maintain. 

That could include things like: 

• Offering optional protection at the point of lending, supported by smart workflow and adviser tools 

• Using data to personalise coverage and keep underwriting efficient 

• Letting cover adjust automatically as the loan is repaid, without extra paperwork 

It’s about helping insurers give people more confidence, without asking them to jump through more hoops. 

A shared opportunity 

This isn’t just a job for insurers. Banks, regulators and technology partners all have a role to play. The point isn’t to bring back aggressive cross-selling or old habits. It’s about quietly restoring a layer of protection that supports financial wellbeing. 

AMS already supports over 40 percent of New Zealand’s life insurance policies and is built to handle complexity with clarity. For insurers looking to revisit mortgage-linked life cover, AMS Protego can offer the flexibility and integration needed to deliver effective and efficient service, whether it’s through adviser channels, digital onboarding or partnerships with lenders. 

Looking ahead 

As economic conditions evolve, more families are feeling financial pressure. Reintroducing sensible, accessible protection alongside mortgage lending won’t solve every issue, but it’s a step that could make a real difference. 

Sometimes it’s not about new products. It’s about rethinking how we deliver existing ones with care, with context and with the right technology behind the scenes.  Because for most homeowners, it’s not just about the property. It’s about the life they’re building inside it.