Property Mortgage Insurance vs HPS vs MRTA
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What is Property Mortgage Insurance in Singapore?
If you believe in the importance of purchasing life insurance, term insurance, and health insurance in protecting your wellbeing, the same principle applies to safeguarding your home.
Essentially, property mortgage insurance in Singapore provides financial protection to you and your family by covering your outstanding housing loan amounts in the event of your death, terminal illness, or total and permanent disablement (TPD). It is designed to alleviate the financial burdens on your dependents, ensuring they’re not left responsible for mortgage repayments while protecting them from the risk of losing the property.
Depending on the type of property and loan arrangement, mortgage insurance can fall under either the Central Provident Fund’s (CPF) Home Protection Scheme (HPS) for HDB flats or a private plan for private properties.
What is Home Protection Scheme (HPS)?
For homeowners using their CPF savings to pay off their HDB housing loan, the Home Protection Scheme (HPS) is a mandatory mortgage-reducing term insurance. As the name suggests, the coverage amount decreases in line with your outstanding loan balance over time. Overall, the HPS financially protects your family by covering any outstanding loan amount in the event of your death, terminal illness, or TPD. This ensures your loved ones can retain ownership of the HDB flat without the burden of repaying the remaining mortgage.
Premiums are automatically deducted from one’s CPF Ordinary Account, with the payment term only lasting 90% of the HPS coverage period. It’ll also cover homeowners until the age of 65, or until the housing loan is fully paid, whichever comes first. However, if you’re servicing your mortgage with cash or a bank loan, HPS is optional. An alternative insurance coverage may be more beneficial instead.
What is MRTA (Mortgage Reducing Term Assurance)?
For private properties, like condominiums and landed homes, homeowners have the option of choosing a private mortgage insurance plan known as Mortgage Reducing Term Insurance (MRTA).
Unlike traditional insurance, MRTA is a unique type of mortgage insurance where your coverage amount is directly proportional to your mortgage amount. It mirrors the journey of your home loan—starting with full protection when your home’s mortgage is at its highest, then gradually easing as your debt diminishes.
In the early years, your home enjoys the fullest shield of coverage; but with each repayment made, the outstanding loan balance shrinks, and so does your MRTA’s coverage.
💡 Pro-tip: HPS and MRTA are both mortgage-reducing insurance plan types.
Types of Mortgage Insurance: Level Term Life vs HPS vs MRTA
| Feature | Level Term Insurance | HPS | MRTA |
|---|---|---|---|
| Premiums | May be cheaper due to discounts by provider | Paid via CPF savings | Fixed throughout tenure |
| Coverage scope | Varies depending on provider | Protects HDB mortgage loan (via CPF) | Protects personal mortgage loan only |
| Coverage amount | Fixed sum assured throughout policy term | Decreases over time (as loan balance shrinks) | Decreases over time (as loan balance shrinks) |
| Eligibility | Any homeowner | Mandatory if using CPF for HDB loan (unless exempted) | Any homeowner |
| Flexibility & payout recipient |
Very flexible Nominated beneficiaries are free to use payouts for any purpose at their own discretion; no automatic payout to the bank |
Limited flexibility Cannot nominate payout recipient or use funds for other purposes; it automatically goes towards outstanding HDB loan |
Varying flexibility Can designate beneficiary to receive payout, allowing funds to be used for other needs in events of death or disability |
From this, it’s clear that HPS and MRTA serve different demographics and functions. HPS mainly delivers CPF-driven protection for public housing homeowners whereas MRTA is more flexible, offering customisable coverage and beneficiary nomination for private property owners. Sometimes, MRTA gets bundled together with your housing loan at preferential interest rates.
Safeguard Your Family, Secure Your Mortgage
A home is one of the biggest financial commitments you’ll make—and the last thing you’d want is to leave your loved ones with an unpaid mortgage debt. Protect your home and family today by exploring the best mortgage insurance plans in Singapore.
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Is Level Term Insurance the Same as Mortgage Insurance?
This is a very reasonable question—and a common point of confusion.
While term life insurance is primarily intended for general life insurance needs, it can also be used to safeguard home loans. The key difference lies in how the coverage works.
Unlike HPS or MRTA, which are directly tied to outstanding mortgage balance and reduce over time, term insurance offers fixed coverage throughout the policy term. This means the payout remains the same—whether it’s year 1 or year 25—regardless of how much of your mortgage is left. Consequently, premiums also stay consistent and don’t decrease over time.
In addition, what makes term insurance especially appealing is its versatility. Its coverage amount and policy duration can be adjusted flexibly to match your needs. Moreover, unlike mortgage-specific plans, payouts from a term insurance policy aren't restricted to loan repayment. It can be used for any purpose, including other crucial living expenses, education costs, or other essential needs.
Does Home Insurance Cover Mortgage Payments?
No, home insurance does not cover mortgage payments—that’s a common misconception. Home insurance is different, and not to be confused with mortgage insurance.
Typically, home insurance covers physical damage (like fire or water damage) to your property, not your outstanding home loan. To safeguard your family from mortgage liabilities and property loss in the event of death, terminal illness, or TPD, a mortgage insurance like MRTA, HPS, or a level term plan is still the most relevant.
Do You Need Mortgage Insurance?
To illustrate, imagine you put a 30% to 40% upfront downpayment on a private property, this could dismiss/make redundant the need for a full-fledged private insurance plan like MRTA. Instead, an existing level term insurance plan could suffice.
Conversely, if your downpayment is minimal like 15% for first-time buyers, a mortgage insurance definitely becomes more beneficial/crucial.
The bottom line is, the younger and healthier you are at time of application, the higher your chances of approval and locking in lower premiums. Delaying mortgage insurance only leads to higher costs, stricter underwriting, and reduced coverage options with age.
| Housing Loan Scenario | HPS | MRTA | Level Term Insurance |
|---|---|---|---|
| If restructuring or exiting loan |
Coverage ends Must reapply or appeal if refinancing through CPF |
Coverage ends Must purchase new MRTA policy or switch to another insurance plan |
Coverage continues regardless of refinancing, early loan redemption, or selling property Ideal for property upgrades, switching moneylenders, or owning multiple properties in the future |
| Portable? | No ❌ | No ❌ | Yes ✅ |
For long-term flexibility in terms of refinancing home loans or future-proofing, level term insurance is the way to go due to its portability. In contrast, for cost-efficiency and commitment to a single property, HPS or MRTA can be more straightforward and sufficient.
As of 2025, assuming it’s your first property, the Monetary Authority of Singapore (MAS) caps the LTV ratio accordingly:
However, the LTV ratio decreases for each additional property owned.
| Housing Loan | LTV Ratio | Minimum Cash Downpayment |
|---|---|---|
| 1st Property | 75% (or 55%^) | 5% (for 75% LTV) 10% (for 55% LTV) |
| 2nd Property | 45% (or 25%^) | 25% |
| 3rd Property & Onwards | 35% (or 15%^) | 25% |
| ^Note: Lower LTV limits apply if loan tenure exceeds 30 years or if the borrower’s age exceeds 65 at loan maturity. | ||
The remaining portion is to be covered by downpayment, which can be fulfilled using either cash, CPF Ordinary Account (CPF-OA), or a hybrid of both. So for instance, since the maximum LTV ratio for bank housing loans is 75%, the remaining 25% payment can be broken down into either:
Remember, MAS ≥ requires 5% of property value to be paid in cash for bank loans.
But which is better: having a higher LTV or lower LTV ratio?
While a higher LTV allows you to borrow more and preserve your cash or CPF, it predisposes you and your family to certain implications:
💡Pro-tip: Besides being a practical way to preserve your property for your family (and future generation to come), mortgage insurance is also sensible if you’re co-purchasing a home as joint tenants. Even if you hold the property as tenants-in-common and plan to sell your share separately in the future, mortgage insurance ensures your portion is fully paid off—helping to avoid disputes or unwanted sales to third parties.
Best Mortgage Insurance Plans in Singapore
- Min. Death and TI Coverage
- S$75,000
- Min. Critical illness Coverage
- S$25,000
- Max. Renewable Age
- N.A.
- Monthly Premium
- S$18.67
- Min. Death and TI Coverage
- S$10,000
- Min. Critical illness Coverage
- S$10,000
- Max. Renewable Age
- N.A.
- Monthly Premium
- S$25.10
Best Level Term Insurance for Your Mortgage
FWD Term Life Plus insurance
- Min. Death and TI Coverage
- S$50,000
- Min. Critical illness Coverage
- S$50,000
- Max. Renewable Age
- Yearly renewable up to age 100
- Monthly Premium
- S$16.84
- Max. Renewable Age
- 74
- Min. Critical illness Coverage
- S$500,000
- Max. Renewable Age
- 74
- Monthly Premium
- S$28.50
- Min. Death and TI Coverage
- S$500,000
- Min. Critical illness Coverage
- S$50,000
- Max. Renewable Age
- 101
- Monthly Premium
- S$28.47
- Min. Death and TI Coverage
- S$100,000
- Min. Critical illness Coverage
- S$100,000
- Max. Renewable Age
- 80
- Monthly Premium
- S$26.75
- Min. Death and TI Coverage
- S$75,000
- Min. Critical illness Coverage
- S$25,000
- Max. Renewable Age
- 85
- Monthly Premium
- S$26.81
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- Min. Death and TI Coverage
- S$150,000
- Min. Critical illness Coverage
- S$50,000
- Max. Renewable Age
- 85 (Age Next Birthday)
- Monthly Premium
- S$11.65
Which insurance plan is right for you? Hear From Our MDRT-Qualified Expert
To help you make sense of this, MoneySmart Financial's MDRT-certified expert is here to give you a hand, with insightful tips on choosing between the different insurance plans, access to comprehensive research, price comparisons, eligibility, or documentation, and ultimately enjoying a seamless insurance selection and application journey.
Did you know? Million Dollar Round Table founded in 1927 serves as an international association uniting various financial professionals, including life insurance agents, financial advisors, and wealth managers? The MDRT recognition is regarded as a mark of distinction, with specific benchmarks for excellence.
Protect the Place You Call Home
Your mortgage may be covered—but is your physical home truly protected? In 2024, 49% of all fires in Singapore occurred in residential houses, so don’t leave it to chance. Explore the best home insurance options in Singapore here!
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Frequently Asked Questions
Can level term insurance be used to cover mortgage repayments?
- Yes, unlike HPS or MRTA, a level term insurance is not directly tied to servicing a home loan. Its payouts are flexible and can be used for a variety of other expenses like daily living costs, education, medical bills, and other needs at the policyholder’s discretion.
Can I have both HPS and private mortgage insurance (MRTA or level term)?
- Yes, you can technically have multiple insurance plans at once to cover your home’s mortgage. While having both gives additional coverage, it’s crucial to assess whether they even align with your needs to avoid unnecessary duplicate coverage and added financial burden.
Should I buy MRTA or just get a bigger level term insurance to cover my home mortgage?
- MRTA payouts are typically just enough to offset the remaining mortgage balance, whereas level term insurance is more likely to provide excess coverage, allowing payouts to be used for other expenses beyond simply servicing the home loan.
Is HPS better than MRTA?
- HPS is not necessarily better than MRTA; it all depends on your financial needs and housing circumstances.
As reiterated, HPS is compulsory for HDB homeowners using CPF to repay their mortgage whereas MRTA is more suited for private property owners desiring more flexibility, customisable coverage, and ability to nominate beneficiaries.
In short, neither is inherently “better” than the other. How are HPS premiums calculated?
- In general, HPS premiums are calculated based on age, loan amount, loan repayment period, outstanding loan balance, and health condition.
Can I be exempted from HPS?
- Yes, HDB homeowners can be exempted from HPS if they don’t use CPF savings to pay their HDB mortgage.
HPS is only mandatory if using CPF-OA to service HDB loans. Does fire insurance cover my housing loan?
- No, fire insurance does not cover your housing loan. Instead, fire insurance in Singapore specifically covers the costs of repairing or rebuilding the structure of your property in the event of fire-related damages.
Moreover, it is mandatory for HDB homeowners to purchase fire insurance before taking out a HDB loan for their mortgage. Is home insurance enough if I die?
- No, home insurance typically only covers physical damage to your property (e.g. fire, theft). It does not cover mortgage repayments.
To fully alleviate your loved ones from the burden of mortgage repayments, you’ll need supplementary mortgage protection such as HPS, MRTA, or level term insurance. Is level term insurance the same as term life insurance?
- Yes, level term insurance is a type of term life insurance.
It is the most common type of term insurance in Singapore, providing a fixed sum assured with fixed premiums throughout the coverage period. It offers predictable coverage and consistent premiums without incurring significant financial burden over time. Can I buy MRTA for a second property?
- Yes, MRTA is not restricted to the first property and can be purchased for second and subsequent properties.
Do I still need HPS if I’ve fully repaid my HDB loan?
- No, if you’ve already paid off your HDB loan, you no longer need HPS since its primary purpose is to cover outstanding mortgage balance.