How Much Mortgage Insurance Coverage Do You Need in Singapore | Homejourney

This definitive guide from Homejourney explains exactly how much mortgage insurance coverage you need for HDB flats and private properties in Singapore. Whether you're a first-time buyer or investor, understanding mortgage insurance coverage, HPS requirements, and private options protects your family and home from financial risks.[1][2]

Homejourney prioritizes your safety by verifying all information, so you can confidently calculate your mortgage protection amount and compare options. Start with our bank rates page to see live rates from DBS, OCBC, UOB, and more while assessing insurance needs.[1][2][3]

Table of Contents

• Executive Summary
• What is Mortgage Insurance?
• HDB vs Private Property Differences
• How Much Coverage Do You Need?
• Calculating Your Insurance Needs
• Home Protection Scheme (HPS) Explained
• Private Mortgage Insurance Options
• Premiums and Costs Breakdown
• HPS vs MRTA vs Level Term Comparison
• When and Why to Buy More Coverage
• Common Mistakes to Avoid
• Frequently Asked Questions (FAQ)
• Next Steps with Homejourney

Executive Summary

Mortgage insurance in Singapore ensures your family won't lose your home if death, terminal illness, or total permanent disability (TPD) occurs. For HDB flats using CPF, HPS is mandatory, covering at least your share of the loan—e.g., 80% if you pay 80% of installments.[1][2]

Private properties use options like MRTA or level term insurance, with coverage matching your outstanding loan, up to S$1.25 million for some plans.[3] Use Homejourney's mortgage calculator to estimate your insurance calculation alongside loan eligibility under TDSR and MSR rules.[2]

Key Insight: Coverage should equal 100% of your loan share initially, decreasing as you repay. Premiums start low—e.g., S$18/month for S$500k coverage at age 40—but rise with age or health changes.[1][3]

What is Mortgage Insurance?

Mortgage insurance coverage pays off your outstanding home loan if you're unable to due to death, TPD, or terminal illness. It protects dependents from repaying the loan, preventing property loss.[1][2]

In Singapore, it's tailored to property type: HPS for HDB via CPF Board, or private plans (MRTA, decreasing term) from banks like DBS, OCBC, UOB.[1][3][4] Unlike fire insurance, which covers property damage, mortgage insurance targets loan repayment.[2]

Homejourney verifies these details from official sources like CPF and MAS, ensuring trustworthy advice. Always pair it with bank loan comparisons for full protection.

Why It Matters for Singapore Buyers

With 2025 LTV limits at 75% for first bank loans and 80% for HDB, loans average S$500k-S$1M. Without insurance, families face selling the home to settle debts.[2] HDB mandates it for CPF users to safeguard public housing stability.[5]

HDB vs Private Property Mortgage Insurance

HDB owners using CPF Ordinary Account (OA) must join HPS or get equivalent private coverage. Private property buyers have flexibility but no HPS eligibility.[1][2]

For HDB upgraders in areas like Punggol or Tengah, HPS resets premiums on new flats, potentially higher with age.[1] Private condos in Orchard or Marina Bay suit MRTA from OCBC or DBS.[3][4]

How Much Mortgage Insurance Coverage Do You Need?

The mortgage protection amount equals your share of the outstanding loan at any time. For sole owners, 100%; joint owners split proportionally—e.g., 60/40 if payments match.[1]

Start with full loan: S$800k HDB loan means S$800k initial coverage, decreasing yearly. Exceed HPS minimum (your installment proportion) for extra family security.[1][2]

Insider Tip: For investors buying ECs in Simei, cover 100% even if co-owned, as CPF rules tighten post-MOP.[5] Use Homejourney's eligibility calculator for precise how much insurance figures.

Factors Influencing Coverage Amount

• Loan Size: Matches LTV—75% of S$1M condo = S$750k max loan/coverage.[2]
• Ownership Share: CPF contribution dictates minimum HPS %.[1]
• Age & Health: Private plans up to age 65; HPS to 65 or loan end.[5]
• TDSR/MSR: Ensures affordability, indirectly sizing loans/insurance.[2]

Calculating Your Insurance Needs: Step-by-Step

Follow this framework for insurance calculation:

1. Determine Loan Amount: Use Homejourney bank rates simulator for SORA-based loans from DBS/OCBC.
2. Assess Share: If joint, prorate by CPF used—e.g., S$500k loan, 70% your CPF = S$350k coverage.[1]
3. Project Balance: Decreasing cover follows amortization; tools show yearly drop.
4. Add Buffer: 10-20% extra for joint policies if one income supports family.[4]
5. Check Premiums: Age 40, S$1M loan: ~S$90-180/month.[3]

Example: 35-year-old buying S$600k Punggol BTO HDB with S$480k HDB loan (80% LTV). Sole applicant: Cover S$480k via HPS. Premium deducted from CPF-OA.[2][5]

Home Protection Scheme (HPS) Explained

HPS is CPF Board's mandatory scheme for HDB/Design-Build-Execute flats using CPF-OA. Covers death/TPD until age 65 or loan paid.[5]

Premiums based on age, loan quantum, tenure, health. Exempt if no CPF used or equivalent private cover (e.g., whole life).[2] Re-apply on resale/upgrade—risk denial if health worsens.[1]

Table of Sample HPS Coverage Needs:

Private Mortgage Insurance Options for Bank Loans

For bank loans (DBS, UOB, HSBC), choose MRTA (decreasing cover, affordable) or level term (fixed sum assured).[2][4]

OCBC Group Mortgage: Up to S$1.25M, no underwriting, portable after 3 years. Age 40 joint S$1M condo: S$144/month for full cover.[3]

DBS eDecreasingTerm: Customizable to loan interest (1-5%), covers private/HDB bank loans.[4] Income's Mortgage Term or Prudential PRUMortgage offer similar TPD/death payouts.[7][8]

Homejourney Tip: Compare via our platform—submit one app via Singpass to multiple banks including Maybank, CIMB.

Premiums and Costs Breakdown

HPS: CPF-funded, increases with age/new property. Private: Age/health-based, e.g., OCBC rates:

Costs drop as coverage decreases. Factor into MSR (30% income for HDB).[2]

HPS vs MRTA vs Level Term Comparison

When and Why to Buy More Than Minimum Coverage

Minimum suffices for HPS compliance, but add level term for non-loan risks like income loss. Post-65, private cover bridges HPS end.[5]

For refinancing via Homejourney's multi-bank system, reassess coverage—SORA shifts may alter balances.[4] Investors with multiple properties stack policies.

Common Mistakes to Avoid in Mortgage Insurance

• Underinsuring: Covers only minimum, leaving family exposed.[1]
• Ignoring portability: HPS non-portable; private better for movers.[3]

References

1. Singapore Property Market Analysis 1 (2025)
2. Singapore Property Market Analysis 2 (2025)
3. Singapore Property Market Analysis 3 (2025)
4. Singapore Property Market Analysis 4 (2025)
5. Singapore Property Market Analysis 5 (2025)
6. Singapore Property Market Analysis 7 (2025)
7. Singapore Property Market Analysis 8 (2025)