Protect your family's home by ensuring your mortgage is paid off if something happens to you. Mortgage term insurance provides peace of mind that your loved ones won't lose their home during an already difficult time.
Why It Matters
Buying property in Singapore is a significant investment, especially for expats. With property prices among the highest in the world, many expats take on substantial mortgages. But what happens to your family and your home if you're no longer around to make the payments?
Mortgage term insurance (also called Mortgage Reducing Term Assurance - MRTA) is designed specifically to pay off your outstanding home loan. The coverage decreases over time as you pay down your mortgage, keeping premiums affordable.
Unlike Singapore Citizens and PRs who can use CPF for mortgage insurance, expats must pay premiums in cash. The good news: this gives you more flexibility to choose the best policy and potentially better coverage than CPF-linked options.
Sum assured starts at your loan amount and decreases as you pay down the mortgage
Choose lump sum payment or spread costs over years
Upon death or TPD, the payout goes directly to settling your outstanding loan
Options
Traditional mortgage insurance where coverage decreases as your loan balance reduces.
Best for: Straightforward mortgage protection at the lowest cost
Regular term life insurance with fixed coverage. Excess goes to your family, not just the bank.
Best for: More flexibility and additional protection for family
Expert Advice
Banks often bundle insurance with mortgages, but you're not obligated to buy from them. Shop around as independent policies are often cheaper and more flexible.
While MRTA is cheaper, level term gives your family extra funds beyond the mortgage. If you sell or refinance, level term isn't affected.
Expats pay Additional Buyer's Stamp Duty (ABSD). If you pass away and your family sells the property, ensure they have funds for potential ABSD clawback within the holding period.
If buying with a spouse, both should be insured. Consider joint-life or separate policies to ensure the survivor can keep the home.
Common Questions
For HDB flats purchased with a HDB loan, mortgage insurance is mandatory for Singapore Citizens and PRs. For private properties and bank loans, it's not mandatory but highly recommended. As an expat buying private property, the decision is yours.
Traditional MRTA from banks may be tied to your specific loan. Independent policies or level term insurance can usually be maintained when you refinance. Always check portability before purchasing.
For MRTA, you typically get a partial refund of the single premium. Level term insurance continues regardless. You can keep it, convert it to cover a new property, or surrender it. This flexibility is why many advisors prefer level term.
Get a personalized mortgage insurance quote and protect your family's home.