Do You Need Mortgage Insurance in Singapore?
Whether you need mortgage insurance in Singapore depends on your property type and financing method. If you're using CPF to pay for an HDB flat, the Home Protection Scheme (HPS) is compulsory unless you have qualifying alternative insurance.[2][3] For private property owners, mortgage insurance is not mandatory, but it's strongly recommended to protect your family from financial hardship if you pass away or become permanently disabled.[3] Understanding which type of coverage you need—and how it affects your loan approval—is crucial for making informed decisions about your home purchase.
At Homejourney, we believe that transparent, trustworthy guidance about mortgage protection is essential for Singapore buyers. This article breaks down mortgage insurance types, eligibility requirements, and actionable steps to strengthen your loan application.
Understanding Mortgage Insurance Types in Singapore
Singapore offers three primary mortgage insurance options, each with distinct advantages and limitations. Knowing the differences helps you choose coverage that aligns with your financial goals and improves your overall loan application profile.
Home Protection Scheme (HPS)
HPS is a decreasing term insurance specifically designed for HDB borrowers using CPF.[2][10] The sum assured decreases as your mortgage balance reduces, eventually reaching zero when the policy expires or you turn 65, whichever is earlier.[2] HPS is mandatory if you use CPF-OA for loan repayments, making it the default protection for most HDB owners.[3]
Key limitations: HPS cannot be transferred to a new property if you upgrade or move.[2] If you purchase a private property later, you'll need to apply for new coverage based on your age at that time, which may result in higher premiums.[2] Additionally, HPS coverage ends at age 65, leaving you unprotected for any outstanding balance beyond that age.[6]
Mortgage Reducing Term Assurance (MRTA)
MRTA is a flexible decreasing term insurance option available to both HDB and private property owners.[2] Like HPS, the sum assured decreases over time to match your outstanding loan balance.[2] The key advantage is that MRTA is portable—you can transfer it to a new property if you upgrade, avoiding age-based premium recalculation.[2]
MRTA is particularly valuable for buyers planning to upgrade their property in the future.[2] Banks increasingly bundle MRTA with mortgage packages, especially in 2026 offerings from DBS, OCBC, and UOB, which include integrated insurance coverage with cashback incentives.[1]
Level Term Insurance
Level Term insurance maintains a constant sum assured throughout the policy term, unlike decreasing options.[2] This means your family receives the same coverage amount whether you claim in year one or year twenty. For a 40-year-old non-smoking male with a $600,000 home loan over 25 years, Level Term can cost as low as $816.45 per month—often cheaper than HPS while providing superior coverage.[2]
Level Term is ideal if you want better value and plan to hold your property long-term.[2] It's also the most flexible option, as it's not tied to your mortgage and can be used for other purposes if needed.
Mortgage Insurance & Loan Approval: What Banks Actually Look For
Banks assess mortgage insurance as part of your overall risk profile. Having appropriate coverage doesn't directly guarantee approval, but it demonstrates financial responsibility and protects the lender's interests, which can positively influence lending decisions.
How Insurance Affects Your Application
When you apply for a home loan through Homejourney's Bank Rates platform, banks evaluate several factors beyond insurance: your debt-to-service ratio (TDSR), income stability, credit history, and down payment amount.[4] However, having robust mortgage insurance coverage signals that you're a prudent borrower who understands financial risk management.
In 2026, leading banks like DBS, OCBC, and UOB have bundled mortgage insurance directly into their loan packages, making it easier to secure comprehensive coverage during the application process.[1] These bundles often include additional protections—such as zero-deductible claims on water leaks and liability coverage for households with domestic helpers—that strengthen your financial resilience.[1]
The TDSR Connection
Your Total Debt Service Ratio (TDSR) is capped at 60% by MAS regulations.[2] Banks calculate this by dividing your total monthly debt obligations (including the new mortgage) by your gross monthly income. Mortgage insurance premiums are typically not included in TDSR calculations, meaning they don't reduce your borrowing capacity. This makes insurance an excellent way to protect your family without impacting your loan eligibility.
Proven Strategies to Improve Your Mortgage Approval Chances
Beyond selecting appropriate insurance, several concrete steps can significantly strengthen your loan application and increase approval odds.
1. Secure Pre-Approval Using Homejourney's Eligibility Calculator
Before formally applying, use Homejourney's Bank Rates mortgage eligibility calculator to understand your borrowing power. This tool instantly shows how much you can borrow based on your income, CPF balance, and existing debts. Knowing your maximum loan amount before house hunting prevents wasted time on properties outside your budget and demonstrates preparedness to banks.
Pro tip: Calculate your eligibility using conservative income estimates. If you qualify for more than you initially thought, you'll have pleasant flexibility; if you qualify for less, you can adjust your property search accordingly.
2. Strengthen Your Debt-to-Service Ratio
Lower your TDSR by paying down existing debts before applying. Credit card balances, car loans, and personal loans all count toward your 60% TDSR limit. Even reducing outstanding balances by $5,000–$10,000 can noticeably improve your approval odds, especially for larger loan amounts.
If you have multiple credit cards, consolidate balances onto one card and request a credit limit increase—this improves your credit utilization ratio without adding new debt.
3. Maximize Your Down Payment
Putting down 20–25% instead of the minimum 5% signals financial stability and reduces the lender's risk. A larger down payment also means a smaller loan amount, which improves your TDSR and increases approval certainty. If possible, save an additional 3–5% for closing costs (legal fees, valuation, stamp duty) to avoid last-minute financial strain.
4. Use Homejourney's Multi-Bank Application for Competitive Advantage
Instead of applying to banks individually, submit one application through Homejourney's Bank Rates platform to receive offers from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and other major lenders simultaneously. This approach:
- Saves time—no need to visit multiple bank branches or fill out separate forms
- Improves approval odds—multiple banks reviewing your application increases chances of at least one approval
- Enables rate comparison—you can choose the best offer without manual shopping
- Uses Singpass integration—your income, employment, and CPF data auto-fills instantly for faster processing
Banks view Homejourney applications positively because they're pre-screened and verified, reducing processing time and administrative burden.
5. Bundle Insurance with Your Mortgage Application
Apply for mortgage and home insurance together through your bank's bundled package. In 2026, DBS's HDB Upgrade Booster includes $3,200 cashback plus free 3-year fire insurance, while OCBC FamilyFlex offers $2,800 in perks including discounted home insurance.[1] These bundles provide:
- Multi-year premium discounts (up to 35% savings)
- Simplified claims processing
- Additional coverage benefits (contents, liability, zero-deductible repairs)
- Immediate financial relief through cashback that funds legal fees and closing costs
Bundling demonstrates to the bank that you're thinking holistically about financial protection, which strengthens your application profile.
6. Document Your Financial Stability
Prepare comprehensive financial documentation before applying:
- Employment verification: Recent appointment letter, employment contract, or letter from employer confirming your position and salary
- Income documentation: Last 3 months of payslips, last 2 years of tax returns (especially if self-employed)
- CPF statements: Recent CPF account statements showing your Ordinary Account and Special Account balances
- Bank statements: Last 3–6 months of bank statements showing regular deposits and financial discipline
- Credit report: Obtain your own credit report from Credit Bureau Singapore to identify and address any issues before banks review it
- Asset documentation: Proof of savings, investments, or other assets that demonstrate financial capacity
Having these documents ready accelerates processing and shows banks you're organized and serious about the application.
7. Avoid Major Financial Changes Before Approval
During the application period, avoid:
- Changing jobs (banks prefer employment stability)
- Taking on new debt (car loans, credit cards, personal loans)
- Making large cash withdrawals or deposits (raises questions about money sources)
- Closing bank accounts or moving funds between institutions
- Applying for multiple credit products (multiple credit inquiries damage your score)
These actions can trigger additional scrutiny or even application rejection. If a job change is unavoidable, inform your bank immediately and provide documentation of the new role.
8. Compare Rates and Lock In Early
Interest rates fluctuate based on SORA (Singapore Overnight Rate Average) movements. In 2026, banks are offering competitive rates bundled with insurance and cashback perks.[1] Use Homejourney's Bank Rates platform to track live SORA rates and compare offers from all major banks. If rates are favorable, lock in your offer before major calendar events (Chinese New Year, year-end holidays) when banks may adjust pricing or withdraw promotions.
Step-by-Step Application Process via Homejourney
Here's how to apply for a mortgage with integrated insurance coverage through Homejourney's trusted platform:
- Calculate your eligibility: Visit Bank Rates and use the mortgage calculator to determine your borrowing power based on income and CPF balance.
- Search for properties: Use Homejourney's Property Search to find properties within your approved budget.
- Prepare documentation: Gather payslips, CPF statements, bank statements, and employment verification documents.
- Submit multi-bank application: Complete one application form on Bank Rates using Singpass for instant data auto-fill.
- Receive offers: Banks review your application and send offers directly through Homejourney within 3–7 business days.
- Compare and select: Review rates, insurance bundles, cashback, and terms side-by-side on the platform.
- Proceed with chosen bank: Accept the offer and work with the bank's mortgage team to finalize documentation and insurance selection.
- Complete valuation and legal review: The bank arranges property valuation and legal review (often covered by bundled packages).
- Final approval and disbursement: Once all conditions are met, the bank approves the loan and disburses funds to your lawyer for property completion.
Insurance Coverage Recommendations by Scenario
Your ideal insurance choice depends on your specific circumstances:
- First-time HDB buyer staying long-term: HPS is mandatory if using CPF. Consider supplementing with Level Term for additional coverage beyond age 65.
- Planning to upgrade in 5–10 years: Choose portable MRTA instead of HPS to avoid age-based premium recalculation when you purchase your next property.
- Private property owner: Level Term insurance offers superior value and flexibility compared to MRTA. Shop across insurers using Homejourney's Bank Rates to find competitive quotes.
- High-income earner with substantial assets: Level Term provides consistent protection regardless of loan balance, offering peace of mind for families with significant financial obligations.
- Household with domestic helpers: Prioritize bundled insurance packages that include liability coverage and zero-deductible claims for accidental damage—especially important if helpers assist with cleaning or renovations.[1]
Common Mistakes That Hurt Approval Chances
Avoid these errors that frequently result in loan rejection or unfavorable terms:
- Applying without pre-approval: Submitting applications to multiple banks without understanding your borrowing capacity wastes time and damages your credit score through multiple inquiries.
- Neglecting to compare insurance options: Accepting the first insurance option without shopping around can cost thousands in unnecessary premiums over 25 years.
- Underestimating closing costs: Many buyers forget to budget for legal fees ($2,000+), valuation fees, stamp duty, and agent commissions—leading to last-minute financial stress.
- Skipping the fine print: Bundled packages often have minimum loan sizes ($400,000+) and lock-in periods (typically 2 years). Understand these terms before committing.
