When you refinance your home loan in the Philippines, your mortgage isn't the only thing that changes — your home insurance arrangements may need to change too. Many homeowners are caught off guard by insurance requirements during refinancing, unsure whether their existing policy is still valid, whether they need a new one, or how the transition works when switching banks. Getting this wrong can cause costly delays or even jeopardise your refinancing approval.
This FAQ covers the most common questions Filipino homeowners have about home insurance when refinancing, from policy transfers and fire insurance requirements to MRI (Mortgage Redemption Insurance) and what your new lender will actually ask for. Whether you're refinancing with BDO, BPI, Security Bank, or any other Philippine lender, the answers below will help you navigate the process with confidence. If you're still exploring whether refinancing makes financial sense for your situation, our home loan refinance calculator is a great place to start.
Yes, refinancing can affect your home insurance in several important ways. When you refinance, you are effectively closing your old loan and opening a new one with a different lender (or in some cases, restructuring with the same lender). Because your mortgage lender is listed as the "loss payee" or "mortgagee" on your fire insurance policy, changing lenders means that the beneficiary on your insurance policy must be updated to reflect your new bank.
If you don't update the mortgagee details, claims made during or after the refinancing period could be complicated or disputed. Your insurance provider needs to be notified of the change so the policy endorsement reflects your new lender. In many cases, this is a straightforward administrative update — but it must be done, and ideally before your new loan is drawn down. Your new lender will typically require proof that their name appears on the policy before releasing the loan proceeds.
Not necessarily. Philippine banks require that your property be covered by a fire insurance policy for the duration of your home loan, but this does not automatically mean you need a brand new policy when you refinance. If your existing fire insurance policy is still active and valid, you may simply need to update the mortgagee clause — replacing your old bank's name with your new lender's name — through an endorsement from your insurance provider.
However, there are situations where a new policy is required. Some banks insist on insurance sourced through their accredited providers or on policies that run for a specified minimum term aligned with your new loan. If your current policy is due to expire soon, or if it was underwritten by an insurer not accredited by your new bank, you may be asked to secure a new policy. Always check with your new lender early in the process so there are no last-minute surprises at loan drawdown.
In most cases, yes — you can transfer or reassign your existing fire insurance policy to your new lender rather than taking out an entirely new policy. This is done through an endorsement process with your insurance company. You would formally notify your insurer that your home loan has moved to a new bank, and they will issue an endorsement document that replaces the old mortgagee details with the new lender's information.
To initiate this, contact your insurance provider and request a "change of mortgagee" or "endorsement" on your existing policy. You'll need to provide the full name and address of your new lender exactly as they require it (each bank has specific wording for their mortgagee clause — ask your new bank for the exact text). Some insurers charge a small administrative fee for this endorsement, but it is generally far cheaper than taking out a new policy. Once issued, you'll need to submit the endorsed policy to your new bank before they release the loan.
Mortgage Redemption Insurance (MRI) is a type of life insurance tied to your home loan. It ensures that if the borrower dies or becomes permanently disabled before the loan is fully paid off, the insurance payout will cover the remaining loan balance — protecting both the lender and the borrower's family from being left with outstanding debt.
Most Philippine banks require MRI (or an equivalent life insurance assignment) as a condition of your home loan. When you refinance, your old MRI policy is typically cancelled along with your old loan. You will generally need to secure a new MRI policy with your new lender — either through their in-house insurance arm or an accredited insurer. The premium is based on factors including your age, the loan amount, and the loan term, so your MRI cost when refinancing may differ from your original premium, particularly if you are older than when you first took out your mortgage. Check with your new lender for their specific MRI requirements and compare rates where possible, as premiums can vary significantly across providers.
You, the borrower, are responsible for maintaining valid home insurance coverage throughout the refinancing process — including during the transition period between closing your old loan and drawing down your new one. There is no automatic coverage handover between lenders, so it is your responsibility to ensure there is no gap in your fire insurance protection.
In practical terms, this means you should not cancel your existing fire insurance policy until your new policy (or the endorsed version of your current policy naming your new lender) is confirmed and in place. If your new bank requires you to prepay insurance premiums as part of the loan setup, those costs are typically factored into your closing or processing fees. Budget for both MRI and fire insurance premiums as part of your refinancing cost calculation. For a fuller picture of what refinancing will cost versus what you'll save, try our refinance break-even calculator to see when your savings outweigh the upfront costs.
A gap in coverage — even a brief one — can have serious consequences. If your property is damaged by fire, flooding, or another covered event during a period when your insurance is lapsed or the mortgagee details are incorrect, your claim could be denied or disputed. This would leave you personally liable for the cost of repairs or rebuilding, on top of still owing your mortgage balance.
From a lender's perspective, a gap in coverage is also a red flag. If your new bank discovers that the property was uninsured or improperly insured during drawdown, they may delay or refuse to release your loan funds. To avoid this, coordinate the timing of your insurance endorsement or new policy issuance carefully with your refinancing settlement date. Aim to have your updated or new insurance documents ready at least a week before your scheduled loan drawdown so there is time to resolve any issues without holding up your settlement.
Philippine banks are permitted to require that you have fire insurance and MRI as conditions of your home loan, and many have accredited insurers or in-house insurance products they prefer or require you to use. In practice, some lenders make it a condition that your insurance be sourced through their approved providers, while others are more flexible and will accept policies from any BSP-accredited insurer, provided the mortgagee clause and coverage amounts meet their requirements.
If a bank insists you use their in-house insurance product, it is worth comparing the premium against what you could get on the open market, since bancassurance products are not always the most competitively priced. The Bangko Sentral ng Pilipinas (BSP) has issued guidance discouraging banks from making credit conditional on the purchase of their own financial products (this is known as tying), but in practice enforcement varies. If you feel a lender's insurance requirement is unreasonable, ask whether accredited third-party insurers are accepted as an alternative. Working with a mortgage broker like Nook can help you identify lenders with more flexible insurance requirements.
Fire insurance premiums in the Philippines are typically calculated as a percentage of the property's insured value (the replacement cost of the structure, not the land). For a standard residential property, fire insurance premiums generally range from 0.05% to 0.15% of the insured value per year, depending on the property type, construction materials, and location. For example, a home with an insured value of 3,000,000 might pay between 1,500 and 4,500 per year in fire insurance premiums.
MRI premiums vary more significantly because they depend on the borrower's age and health, the loan outstanding balance, and the term remaining. As a rough guide, MRI for a 3,000,000 loan might range from 5,000 to 20,000 per year depending on the borrower's age. When you refinance, some banks roll the first year's insurance premiums into your closing costs, while others require them to be paid separately upfront. Make sure you account for both types of insurance as part of your total refinancing cost — not just the processing fee and appraisal.
When refinancing, your new lender will typically require the following insurance-related documents before they release your loan: (1) A copy of your fire insurance policy showing the property address, insured value, and policy period — with the new lender listed as the mortgagee and loss payee; (2) Official receipts or proof of premium payment confirming the policy is active; and (3) An MRI policy or proof of life insurance assignment covering at least the outstanding loan amount.
Some banks may also ask for the original policy documents rather than photocopies, or may require that the insurance be taken out for a minimum term (for example, at least one year or aligned with the loan repricing period). Your new bank's loan officer should provide you with a checklist of required documents early in the application process — ask for this checklist upfront so you can prepare everything in parallel with your other loan requirements, rather than scrambling at the end. Delays in insurance documentation are one of the most common reasons refinancing settlements are postponed.
Pag-IBIG (HDMF) has its own insurance requirements that differ somewhat from commercial banks. For Pag-IBIG home loans, borrowers are required to have both fire insurance and Mortgage Redemption Insurance (MRI), and Pag-IBIG facilitates these through its own accredited providers. The MRI premium for Pag-IBIG loans is typically included in your monthly amortisation, making it relatively seamless administratively.
If you are refinancing an existing loan (whether from a bank or another Pag-IBIG loan) into a new Pag-IBIG housing loan, you will need to comply with Pag-IBIG's current insurance guidelines at the time of your new loan application. Your existing fire insurance policy may be accepted if it meets Pag-IBIG's requirements and the mortgagee clause is updated accordingly, but in many cases a new policy through Pag-IBIG's accredited insurers will be required. Check directly with your Pag-IBIG branch or servicing office for the most current requirements, as these can be updated periodically. If you are considering refinancing away from Pag-IBIG to a commercial bank to take advantage of lower rates — currently as low as 5.99% p.a. through Nook — be aware that commercial banks have their own separate insurance requirements as outlined above. You can explore current home loan interest rates across Philippine lenders to see where you might save.