Best Mortgage Insurance in Singapore 2023
Find the best mortgage insurance options in Singapore on Seedly. Compare coverage, premiums, deductibles, and many more for your home and apply now to secure your financial future.Updated December 2023Get amazing deals when you sign up for new financial products on Seedly 🎁
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AXA Decreasing Term Assurance Mortgage Insurance (Single Premium)
Single or Joint Life
POLICYHOLDER OPTIONS
$5,000,000
MAX SUM ASSURED
10 to 30 years
POLICY TERM
Full policy term
PREMIUM TERM
1% to 15%
INTEREST RATE
AXA Decreasing Term Assurance Mortgage Insurance (Regular Premium)
Single or Joint Life
POLICYHOLDER OPTIONS
$5,000,000
MAX SUM ASSURED
10 to 30 years
POLICY TERM
3 years less than Policy Term for Regular Premium
PREMIUM TERM
1% to 15%
INTEREST RATE
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Prudential PRUMortgage Mortgage Insurance
Single Life
POLICYHOLDER OPTIONS
Amount of Housing Loan
MAX SUM ASSURED
10 to 35 years
POLICY TERM
3 years less than Policy Term
PREMIUM TERM
1% to 7%
INTEREST RATE
Prudential PRUMortgage Mortgage Refund Insurance
Single or Joint Life
POLICYHOLDER OPTIONS
Amount of Housing Loan
MAX SUM ASSURED
10 to 35 years
POLICY TERM
3 years less than Policy Term
PREMIUM TERM
1% to 7%
INTEREST RATE
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0 Reviews
What is Mortgage Insurance?
Mortgage insurance is an insurance policy that protects you and your family against losing your home in the event that you are unable to make your home loan repayments. Mortgage insurance works by paying out a lump sum when you make a claim to offset the remaining outstanding home loan under specified conditions.
What Does Mortgage Insurance Cover?
While mortgage insurance plans could differ slightly in coverage, they generally cover events of specific and grave circumstances. These specified conditions are serious events that results in you or your family being unable to continue making home loan repayments, specifically death, terminal illness, and or permanent disability.
Types of Mortgage Insurance
Home Protection Scheme (HPS)
If you are living in a HDB flat and paying off your home loan using your CPF savings, you would have likely heard of Home Protection Scheme (HPS). This is because HDB owners who are paying off their home loans using CPF are automatically enrolled into HPS by the CPF. It is not compulsory for HDB owners who have opted to pay off their mortgage by cash to apply for HPS.
However, even if you fall under the category of HDB owners who are automatically enrolled into HPS, you can still be exempted from HPS if you already have at least one of the following:
- Whole life insurance
- Term life insurance
- Mortgage Reducing Term Assurance (MRTA) or a decreasing term rider
- Endowment policy
- Life riders attached to a basic policy
Mortgage Reducing Term Assurance (MRTA)
As for private property owners (condominum or landed properties), you will not be eligible for HPS and are not enrolled into any mortgage insurance by default. If you do decide to get insured, you will need to do so via a private insurance company. The term of private mortgage insurance is essentially known as Mortgage Reducing Term Assurance (MRTA). Similar to HPS, MRTA covers the outstanding mortgage payment of the policyholder throughout the term of the policy.
We have broken down the different types of mortgage insurances in Singapore, their features, and coverages below:
Comparison Between Types of Mortgage Insurance
Type of Mortgage Insurance | Where to Get Insured? | Covers HDB/Private Property? | Coverage | Premium |
|---|---|---|---|---|
Home Protection Scheme (HPS) | CPF | - HDB: Yes - Private Property: No | Up to 65 years old or until the loan is paid. Decreases as outstanding HDB/bank loan decreases | More affordable since coverage decreases (Can be paid with CPF savings from OA) |
Mortgage Reducing Term Assurance (MRTA) | Private insurance companies | - HDB: Yes - Private Property: Yes | Decreases as outstanding HDB/bank loan decreases | More affordable since coverage decreases |
Level Term Assurance (LTA) | Private insurance companies | - HDB: Yes - Private Property: Yes | Coverage remains constant | More expensive since coverage remains constant |
Is It Necessary/Compulsory to Get a Mortgage Insurance in Singapore?
HPS is only compulsory for HDB owners who are paying off their home loan using their CPF savings. However, to make an informed decision about whether you should purchase a mortgage insurance if you are not eligible or are exempted from HPS, it is important to first understand the consequences of being unable to repay your home loan to decide if you should purchase a mortgage insurance. As mentioned, mortgage insurance protects against the lost of your home in the event that a serious and unfortunate mishap incapacitates your ability to continue financing your home loan.
When a serious and unfortunate event causes you to be unable to repay your loan, a foreclosure could happen in a worst case scenario. This means that the bank can take possession of your property and auction it off to cover their losses from the proceeds of your home. While there are other means to help you make repayments when you are under financial distress, such as potential reliefs or negotiations to lower your repayment amount from your bank, knowing the worst case scenario can help you decide if you need to purchase a mortgage insurance.
HPS vs MRTA vs Term Insurance: Which is better?
If you are now convinced to you should purchase a mortgage insurance, which type of mortgage insurance should you get?
All three types of mortgage insurance serve the same purpose, in that they help protect members and their families against losing their flats in the event of death, terminal illness and total permanent disability before they completely pay off their home loans.
Are they complementary of each other or substitutes? If so, which is better?
We have summarised some of key points of the three types of mortgage insurance policies in Singapore, namely Mortgage Insurance, Home Protection Scheme and Term Insurance. We have also compared the pros and cons of each mortgage policy type so that you can make a more informed decision:
Home Protection Scheme (HPS)
Pros of HPS | Cons of HPS |
|---|---|
Should an unfortunate event happen, the outstanding amount of your home loan would be paid by the CPF Board | Only for HDB owners who are financing their home loans using CPF OA |
Premiums are paid via CPF Ordinary Account (OA). They deducted annually and automatically from your OA | HPS issues one policy per borrow. You will need to get two HPS policies and pay for two premiums if you are purchasing the HDB flat jointly with your co-owner. |
Lump sum payout is made directly to HDB with the sole purchase of covering your outstanding mortgage payment, as compared to MRTA | |
Once the specific HDB is sold or you’ve repaid the loan, HPS coverage will terminate. You will need to purchase a new policy if you move to a new home |
Mortgage Reducing Term Assurance (MRTA)
Pros of MRTA | Cons of MRTA |
|---|---|
Greater scope that covers more properties – HDB, Condominium, and Private Properties | Decreasing Term Assurance – Sum assured reduces each year in proportion to the loan amount and loan tenure of the life assured |
Can purchase a joint mortgage policy if you a purchasing your flat jointly with your co-owner. | |
Lump sum payout will be in cash and granted to your co-owner in the event of your demise/permanent disability. Hence, your co-owner will also have more flexibility in determining how the cash is utilised after paying off the outstanding home loan | |
Can be transferred to your next/consecutive properties. This enables you to lock in your premiums at a lower price, as the price of premiums can increase with age | |
Cheaper relative to Term Insurance |
Term Insurance
Pros of Term Insurance | Cons of Term Insurance |
|---|---|
Level Term – Provides levelled coverage and Sum Assured will not decrease over time | Premiums are more expensive than MRTA |
Can be transferred to your next/consecutive properties. This enables you to lock in your premiums at a lower price, as the price of premiums can increase with age |
What Should I Consider Before Buying a Mortgage Insurance?
Here are some guiding questions to help you decide if you should purchase a mortgage insurance:
- Are you the sole breadwinner of the family?
If you are the sole breadwinner of your family, it is highly probable that you are also the only person financing your home loan. In the unfortunate event of death and total and permanent disability, the burden of refinancing your home loan will naturally fall on the shoulders of your other family members. It is recommended to purchase a mortgage insurance if you are the only person making your home loan repayments.
- Are you purchasing the property with another person?
Similarly, if you are purchasing your property with your spouse or another person, it is important to consider both parties’ ability to make repayments should the other be unable to continue repaying the home loan. It is highly recommended to purchase a mortgage insurance especially if you are purchasing the property with the other party as a joint tenant.
- Are you planning to move again?
If you have plans to move to another HDB flat or upgrade to a private property, it may be prudent to purchase a MRTA, since MRTA covers a wider range of property types and allows you to transfer your remaining coverage to your new property. However, do note that MRTA premiums may increase according to the new sum assured when your transfer your policy.
Frequently Asked Questions
How much mortgage insurance do I need?
- If you are the sole homeowner, your mortgage insurance should cover your entire home loan in the event that your family has to bear your entire home loan.
- if you apply for a mortgage insurance jointly with your spouse, your mortgage insurance will still cover your entire home loan. However, the difference is that half of the premiums will be transferred to you or your spouse when either of you pass on. One party will effectively be paying two premiums.
How do I apply for a mortgage insurance plan?
Home owners who choose to finance their mortgage through CPF are automatically enrolled into a mortgage insurance in the form of Home Protection Scheme (HPS). If you are not covered under HPS, you may approach a private insurance company/agent to purchase a mortgage insurance plan.
Is it worth it to buy mortgage insurance?
If you are a sole breadwinner or owner of a private property, it may be worth it to consider getting a mortgage insurance.
What is the difference between mortgage insurance and home insurance?
Mortgage insurance protects the lender (in most cases, banks) in case the homeowner fails to meet the required mortgage payments whilst home insurance protects the home in case of any physical damage or loss-related expenses.
How long do I have to pay mortgage insurance?
You will usually have to pay your mortgage insurance until you have repaid a sufficient portion of your mortgage to signify that you are no-longer a high risk of defaulting your payment. This is typically at about 80% of your home's value.
Does home insurance cover mortgage payments?
No, home insurance does not cover your mortgage payments. Home insurance protects the physical structure of your house and the contents within in the event of unforeseen accidents.
How much does mortgage protection insurance usually cost?
Numerous factors affect the eventual cost of your monthly insurance premium. Some of these factors include: age, health, income, loan amount taken, loan tenure etc.
What happens to mortgage insurance when mortgage is paid?
You will no longer have to pay your mortgage insurance premium once your have fully repaid your mortgage.
How long is a mortgage insurance?
A mortgage insurance is valid for as long as your mortgage tenure.
What happens if you have a mortgage and you lose your job?
If your job loss is taking a hit on your ability to repay your mortgage, it is possible to seek financial assistance measures from banks, such as loan deferment, extensions, or instalment reductions. However, if alternatives to tide you through a period of job lose still makes it unlikely for you to repay your mortgage, foreclosure and bankruptcy may be last resort options that you may look into.
Is it good idea to pay off mortgage?
Many want to payoff their mortgage early in hopes of reducing interest payments. However, paying off your mortgage may not be the most cost effective as investing the cash you would have used to repay your mortgage sonner may yield higher returns. Paying off your mortgage early may also not be a good idea if you return cash liquidity in the short-term.
Related Articles
- Home Loans: Should You Lock In Current Rates Before They Rise Further?
- The Ultimate Compilation of Housing/Mortgage Loans in Singapore
- Home Loans: Should You Lock In Current Rates Before They Rise Further?
- Definitive Guide to Using Your CPF to Repay Your Home Loan Installments For HDB Flats and Private Property
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Seedly's Product Comparison Page Listing Guidelines
For Mortgage Insurance Insurance products to be listed on Seedly's Product Comparison Page, they have to fulfil the following criteria:
- Policies protected under the Policy Owners’ Protection (PPF) Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC)
- Covers home loan repayments should one and his family is unable to make mortgage loan repayments