What is a good mortgage insurance plan? - Seedly
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Leow Ting Yang Dex

Asked 3w ago

What is a good mortgage insurance plan?

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Hi Dex,

Perhaps a more suitable question would be: Which mortgage insurance plan would be best for my situation?

There are many mortgage insurance plans out there. Most of them will allow you to adjust parameters to suit the terms of your mortgage. Some of the considerations are

  • Coverage amount

  • Interest rate

  • Duration

  • Waiver riders

This is usually a race to the bottom as the features are very similar, so people usually opt for the cheapest plan. You'll want to find a policy with a low cost, which an independent financial advisor can help you with.

However, we also need to look at your entire situation. For example, other than the mortgage, do you have other liabilities or dependents? If so, you have to get more coverage over and above just the mortgage amount. It will be more cost efficient to have a single term plan cover the total amount compared to one mortgage term policy for the mortgage and another for your dependents.

Additional, you can consider a level term plan, as the premiums might not be very much more than a mortgage term plan, and in some cases, even cheaper than a mortgage term plan.

As mentioned, there is usually some form of cost efficiency achieved when you get a higher sum assured, such as $1 million, so while a level term with $1 million coverage is 25% more coverage than a $800K reducing term , it could be maybe only 10% more expensive, or, with the current slate of promotions on going, even cheaper than a $800K reducing term. You'd want to see the options available before you commit.

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There are different factors to consider when considering between different Mortgage Insurance Plan. These include premium price, mortgage size and interest rate of your loan. Most importantly, it is key to ensure the policy term is the same as your mortgage repayment duration. The mortgage insurance should also match the interest rate on your loan and the sum assured should be your full mortgage.

Below are some Mortgage Insurance Plans you can consider.

1) AXA Decreasing Term Assurance: Single to Regular premium, with interest rate from 0 up to 15%

2) Etiqa ePROTECT mortgage: Regular premium term, interest rate from 1- 4%

3) NTUC Income Mortgage Term: Regular premium term, interest rate from 1- 7%

You can see a detailed analysis of the Mortgage Insurance Plan here.

As the best policy may differ from individual to individual base on your preference, it is best to consult your financial advisor and request for a quotation table.

Feel free to approach us if you have any other questions.​​​

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Leow Ting Yang Dex
Leow Ting Yang Dex

3w ago

Thank You!