I've owned investment properties and always stuck to one thousand deductible but why not call the insurance company or the bank, they can give you the right answer. Good luck.

When we insured our house, I got a quote for both the $2500 and $1000 deductable (other coverage amounts the same). The higher deductable was, as expected, slightly less per year. But remember, if something happens you must come up with an extra $1500! I did the math, and just one claim in 20 years would erase any savings. Even though we generally avoiding filing claims, I chose the $1000 deductable. Twenty years is a long time.

Weird but the $2,500 deductible is a better policy, when and if something catistrophic were to happen. It will cover up to $501,000 replacement value. The $1,000 deductible only insures the property for $376,000. (Purchase price $286k).

The learning curve is straight up on this stuff...

Since the coverage is different between your two policies, I would lean towards the better coverage/higher deductable one, too. As for the mortgage lender's opinion about such things, they logically would prefer the better coverage. But they often don't work logically, in my experience, so I can't help you guessing what they will want!