The lender will insist on buildings insurance along with life assurance. These are two basic insurances that you should have anyway for your own peace of mind, as mentioned in previous post Homebond wont cover you if your house was burned down, flooded etc. If you want to cut costs shop around for your home insurance, you'll be amazed at how much you could save. Also see if you can reduce your life cover premium - all you need is life cover for the amount of your mortgage. Extras like serious illness, hospital cash etc are expensive, so maybe for now you should consider basic life assurance (even decreasing). You can always take these out later.