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Updated May 2022

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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

    Mortgage Insurance Explained: What is it?

    I believe we have all heard of Mortgage loans, but few know what a mortgage insurance is about. As the term already explains itself, a mortgage insurance, or more commonly known as Mortgage Reducing Term Assurance (MRTA), is one that insures your family members for your mortgage loan in an unfortunate event of death or total and permanent disability.

    Is it necessary to get a Mortgage Insurance in Singapore?

    You may think – “Huh? I just spent money on a mortgage loan, but now I need to fork out even more money for Mortgage Insurance? Do I really need it? Don’t need one lah, I not so suay one!”

    Sometimes, the more you don’t wish for it to happen, the more you will jinx it.

    So, just imagine an event of death or total permanent disability. Without your help, can your family service the mortgage loan themselves? Because if they can’t, your house may be taken away by the bank, leaving no roof for your entire family’ head. I believe, your heart has an answer now.

    Mortgage Insurance vs Home Protection Scheme vs Term Insurance: Which is better?

    If you are now convinced to get one, the next problem comes in. What type of Mortgage Insurance should you get?

    All 3, be it Mortgage Insurance, Home Protection Scheme or Term Insurance, all have one thing in common. Their main purpose is to help protect members and their families against losing their flats in the event of death, terminal illness and total permanent disability while during paying off home loans.

    Are they complementary of each other or substitutes? If so, which is better?

    We have summarised some of key points of the 3 insurance policies, namely Mortgage Insurance, Home Protection Scheme and Term Insurance. We have also compared the Pros and Cons of the following 3 for you to make a more informed decision.

    Home Protection Scheme

    For all owners of HDB flats, paying off home loans using CPF Ordinary Account (OA)

    Type of Insurance: Decreasing Term Insurance

    Coverage Term: Up to 65 years old or until housing loan is paid up/ HDB is sold

     Pros:

    Should an unfortunate event happen, the outstanding amount of your home loan would be paid by the CPF Board. "Under Government should be cheaper"

    Cons:

    • Only for HDB owners, paying home loans using CPF OA
    • Once the specific HDB is sold, the HPS coverage will terminate

    Mortgage Insurance

    Compulsory for owners of HDB using CPF who applied for exemption, and Recommended for owners of condominiums and private properties

    Type of Insurance: Decreasing Term Insurance

    Coverage Term: At least up to 65 years old or until the housing loan is paid up

    Pros:

    • Greater scope that covers more properties – HDB, Condominium, and Private Properties
    • Can be reused on consecutive properties
    • Cheaper relative to Term Insurance

    Cons:

    • Decreasing Term Assurance – Sum assured reduces each year in proportion to the loan amount and loan tenure of the life assured.

    Term Insurance

    Compulsory for owners of HDB using CPF who applied for exemption, and Recommended for owners of condominiums and private properties

    Type of Insurance: Level Term Insurance

    Coverage Term: At the end of the term

    Pros:

    • Level Term – Provides levelled coverage and Sum Assured will not decrease over time
    • Over a long period of time
    • Can be reused on consecutive properties

    Cons:

    • More expensive than Mortgage Insurance

    Yes, for all HDB owners paying their loans using CPF, it is compulsory for you to get either the Home Protection Scheme or a Mortgage Insurance, unfortunately or fortunately. If you are a private property owner, don’t think that you can siam having to buy a mortgage insurance just yet.

    Before you start to gloat at them, it is still highly recommended to be insured because the higher price of private property poses a potential larger financial burden in an unfortunate event. Unless you have psychic’s power that you know you will not meet any unfortunate event in your life, it still better to be safe than sorry.

    Best Mortgage Insurance Plans Available in Singapore

    We have compiled the best Mortgage Insurance companies available in Singapore:

    OCBC Mortgage Insurance

    Tokio Marine TM Mortgage Protection

    NTUC Income Mortgage Term

    Manulife ManuProtect Decreasing

    AXA Decreasing Term Assurance

    AVIVA MyProtector Decreasing

    AIA Mortgage Reducing Term Assurance

    Which Is The Best Mortgage Insurance Plan To Get?

    Ultimately, it depends on your personal preference to determine which Mortgage Insurance Plan to get.

    But the cheapest Mortgage Insurance Plan would be the one that is free. FREE?

    Close your jaw.

    Yes, the best and cheapest Mortgage Insurance Plan would be the OCBC Mortgage Insurance Plus/ Advantage refunds premium paid if there are no claims by the end of the policy term. So while you get the coverage, given that you do not have any claims, you get your money at the end of it, as if you did not spend it in the first place!

    However, the price point may not be your biggest factor as there are greater coverage offered by other companies that may suit your needs even more. You can refer to the products to find out more.

    Now, you can have a peace of mind and roll the pineapple into your new house for some HUAT.

    If you have questions about which Mortgage Insurance Plan to get after reading our Real User Reviews, why not ask our community of experts and experienced members at Seedly Community?

    Contact us at [email protected] should you require any assistance or spot any inaccuracies.

    Frequently Asked Questions

    Should you buy mortgage insurance?

    HDB owners who opt to pay their mortgage using CPF are automatically enrolled for a mortgage insurance known as Home Protection Scheme (HPS). Private property owners, on the other hand, are not mandated to purchase a mortgage insurance. You may apply to be exempted from HPS if you already have the following insurances:

    Mortgage Reducing Term Assurance (MRTA)

    • Whole life insurance
    • Term life insurance
    • Endowment policies
    • Life rider attached to a basic policy

    However, if you are a private property owner considering whether you should purchase a mortgage insurance, here are some considerations that may be worthwhile thinking:

    • Is there a likelihood that you will not be able to make a full mortgage repayment?
    • Do you have other properties that can ensure you still have a home in case of foreclosure?
    • Will anyone be inheriting or taking over your property in the event that something happens to you?

    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.

    What is covered by a mortgage insurance plan?

    You will only be eligible for claims in the event of specific and grave circumstances. Mortgage insurance covers death, total and permanent disability, and some covers terminal illness as well.

    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.

    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.