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Should I pay my home insurance monthly or annually?

You can often choose to pay for your home insurance each month or pay for the whole year upfront. We explain which option can work out best for you.

You can often choose to pay for your home insurance each month or pay for the whole year upfront. We explain which option can work out best for you.

Written by
Rachel Lacey
Insurance and money expert
Last Updated
6 JULY 2023
6 min read
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Paying home insurance annually 

When you pay for your home insurance annually, you’ll make a single one-off payment when the policy starts. This is usually the cheapest way to pay for your home insurance.

If you choose to pay monthly, an interest charge will normally be added. Another benefit of paying for your home insurance in one go is that you won’t have to worry about making monthly payments on time.

Paying home insurance monthly 

When you pay your home insurance monthly by direct debit, you may be asked to pay for one or two months’ cover up front. The remaining insurance premiums will then be paid in monthly instalments throughout the year.

But as your insurance provider has effectively given you a loan to pay for your policy, interest will usually be added to your monthly repayments.

Before it agrees to let you pay for your insurance monthly, your insurance provider will run a credit check on you. If your credit score is poor, you may be charged a higher rate of interest.

Although you’ll likely pay more for your home insurance overall if you pay monthly, you won’t have the worry about finding the money for a larger one-off payment.

What is the price difference between monthly and annual home insurance costs?

If you decide to pay for your home insurance monthly, it’s not as simple as dividing the annual premium into 12 equal payments.

Instead, it’s common for homeowners to pay a slightly larger monthly payment for the first month, followed by 11 subsequent payments.

Paying monthly will also usually incur interest fees, which means paying monthly will often be more expensive than paying annually. The rate of interest will depend on the insurance provider.

Is it better to pay for my home insurance annually?

Paying for your insurance annually, as opposed to monthly, has pros and cons, so you should consider whether it’s suitable for you.


  • It’s cheaper – paying for home insurance in one lump sum is typically cheaper than paying through monthly instalments. Insurance providers often charge interest on monthly payments, so you’ll pay back a little more than if you paid upfront.
  • You’ll have more choice – not all insurance providers allow customers to pay monthly (although most do), so by choosing to pay your home insurance annually you might get to pick from more deals.
  • It’s more convenient – if you make a single annual payment, you’ll make one payment and that’s it for the year.


  • Depending on your finances, you may struggle to pay for your home insurance with one lump sum.

If you can afford it, paying for your home insurance annually usually gets you a better deal.

Of course, paying for insurance monthly is better than not buying home insurance at all. If there was a flood or fire and your home wasn’t insured, the financial consequences could be devastating.

Is it better to pay for my home insurance monthly?

While paying monthly can be more expensive, it can have some advantages too.


  • You can spread the cost of insurance over manageable payments.
  • Household budgeting can be easier as you can add the amount to your monthly outgoings.
  • There are a few insurance providers that offer a monthly payment option for no extra charge (0% interest). 


  • You could pay an expensive rate of interest.
  • Your policy will be cancelled if you don’t keep up your payments.
  • You’ll have more admin to deal with. 

How else can I save money on my home insurance? 

Get the right level of cover

Make sure you’re only paying for the cover you need. Ensure you value your home contents accurately and that your rebuild cost for buildings insurance is correct. 

If you’re overinsured, you’ll end up paying more for your insurance than necessary.  

However, it’s important to be careful. If you’re underinsured and you need to claim, you won’t get the full pay-out.   

Shop around

Rather than letting your home insurance policy auto-renew, it’s well worth shopping around on comparison websites before your policy end date to see if there’s a better offer out there. We can do the legwork for you when you sign up to  Automated Quotes.

Increase your voluntary excess 

You can reduce your premiums by choosing to pay  a higher voluntary excess on your policy. This will mean you have to pay more towards the cost of any claim, so be sure you can afford to pay it before you agree. 

Boost your security

Having high-quality locks on your doors and windows, and installing a security system and smoke alarm, could make your home insurance cheaper. 

Combine policies

You could find it cheaper to get both your buildings insurance and contents insurance one insurance company, if you don’t already. 

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Rachel Lacey - Insurance and money expert

Rachel’s a self-confessed money nerd who’s been writing about personal finance for more than 20 years. She spent 17 years writing for Moneywise, including a few years as Editor, and likes making complicated subjects like insurance, pensions, investing and tax, easy for people to understand.

Learn more about Rachel

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