So you’ve just bought your first home, congratulations! This is likely to be one the biggest investment you will ever make, and you probably have quite a few questions on your mind. One question may be about the insurance your bank mentions is required if you put down under 20%.

But do you need this insurance they’re selling? Are there other options? How does the bank owned mortgage insurance policy differ from a mortgage life insurance policy through a broker?

The bank naturally tries to sell you their in-house credit-life insurance, conveniently bundling it into one mortgage payment and ready for you to sign on the dotted line after approving your mortgage. But hold on. Is insurance through the bank the best choice?

If you’re unaware of the choices you have with your mortgage insurance, you are not alone. This is one of the most common mistakes people make when going through their first home buying process. The bank will tell you life insurance is required to approve your mortgage, but understandably will not generally advise you of outside options. They make extra commission when they sell it, but are limited to the one policy their bank offers.

When you speak with an independent insurance advisor, their job is to search the market for the best mortgage life policy to match your needs. Credit life insurance through the bank may be convenient, but that’s about where their advantages end.

This is crucial information to have, because once you sign up for insurance through the bank, you are locked in until you pay off your mortgage or move and have to cancel it, which means extra costs, re-applying for coverage, and higher premiums on your next policy.