Macquarie Mortgages has launched a product that incorporates general insurance into home loans.

Auto & General, which owns Budget Direct, will provide the cover.

Borrowers can sign up for building, building and contents and landlord insurance during the mortgage application process.

Premiums will be capped for the first three years if borrowers do not claim or change policy details.

The insured value will be indexed to rising building and contents costs.

A single application process reduces the risk of delayed settlement due to outstanding certificates of currency, Macquarie says.