Mortgage Insurance Singapore: Do You Need It? Bank Rate Guide | Homejourney

In Singapore, mortgage insurance is not legally mandatory for all borrowers, but it is compulsory if you use CPF OA for an HDB flat (via HPS) and strongly recommended for private property buyers taking bank loans, especially if you have dependants or a high loan-to-value (LTV) ratio.[1][6] For most borrowers, pairing the right home loan insurance (HPS, MRTA or term) with a suitable bank package is one of the most important safety decisions you make before signing your Letter of Offer.

This cluster article builds on our main pillar guide, How Much Mortgage Insurance Coverage Do You Need: Homejourney Guide How Much Mortgage Insurance Coverage Do You Need: Homejourney Guide , by zooming into a practical question: “Mortgage Insurance Singapore Do You Need It: Bank Rate Comparison Guide” – how to decide if you need mortgage protection and how to compare bank-linked options safely.

What Is Mortgage Insurance in Singapore? (HPS, MRTA & Home Loan Insurance)

Mortgage insurance (or mortgage protection) is a policy that pays off your outstanding housing loan if you pass away, suffer terminal illness, or total permanent disability (TPD).[1][4] It is sometimes called home loan insurance or housing loan insurance.

In Singapore, you will typically encounter three main forms:

Home Protection Scheme (HPS) – CPF Board’s compulsory, reducing-term cover for HDB owners who use CPF OA for monthly instalments.[1][6]
MRTA (Mortgage Reducing Term Assurance) – private reducing-term insurance from banks or insurers, often bundled with bank loans for HDB (bank loan) and private properties.[1][4][5]
Level term insurance – separate term plans matching or exceeding your loan amount, offering constant coverage instead of reducing.

Coverage is usually sized to your share of the loan – 100% for sole owners, or proportional for joint owners (e.g. 70% if you pay 70% of the instalment).[1][2][4]

Do You Really Need Mortgage Insurance in Singapore?

The fastest way to answer this is to look at three factors: property type, how you pay the loan, and your family situation.

1. HDB Flat Buyers (Using CPF OA)

If you are buying an HDB flat in Punggol, Tengah or Queenstown and paying instalments with CPF OA, HPS is compulsory unless you obtain CPF Board exemption by proving equivalent private cover.[1][6]

Legal position: HPS is required for most HDB flat owners using CPF, regardless of whether your loan is from HDB or a bank.[1][6]
Coverage period: Up to age 65 or until the loan is fully paid, whichever is earlier.[6]
Insider tip: In newer estates like Tengah and Bidadari, many buyers stretch loans to 25–30 years. If your loan ends past age 65, CPF explicitly advises you to get private mortgage insurance after HPS ends to avoid a protection gap.[6]

2. Private Property & EC Buyers (Bank Loans)

For a condo in Sengkang or a freehold apartment in District 15, there is no legal requirement to buy mortgage insurance, even if you use a bank loan and CPF OA.[1] However, MAS’ TDSR rules cap your total debt at 55% of income, and most families are highly leveraged – a single income loss can trigger a forced sale.

Recommended: MRTA or term insurance equal to at least your share of the loan (often 100% for the main breadwinner).[1][2][3]
Real example: For a S$1.2M condo in Hougang with 75% LTV, your loan is ~S$900k. A 35-year-old taking 100% MRTA cover for S$900k typically pays a few dozen dollars a month in premiums, compared to several thousand in monthly instalments.[1][5]
Local insight: In older East Coast walk-up apartments, owners often self-insure because of lower outstanding loans. In newer OCR condos like those near Tampines West MRT, buyers in their 30s with high LTV usually take MRTA as a basic safety net.

3. When You Can Consider Skipping Mortgage Insurance

You might reasonably consider going without MRTA or term cover if:

You have no dependants relying on the property (e.g. single buyer with fully independent parents and siblings).
You have substantial liquid assets (e.g. S$1M in investments and cash) that can easily clear the loan.
Your outstanding loan is very low (e.g. less than 1–2 years of income) and you already have strong life/critical illness cover.

Even then, many buyers choose at least a small term plan as a safeguard, especially for HDB upgraders carrying two loans temporarily during a transition period.

How Mortgage Insurance Interacts with Bank Home Loan Rates

Most people focus only on the headline interest rate – 3M SORA + spread vs fixed – but for long-term safety, you should look at the total cost of financing plus protection over your lock-in period.

SORA, Fixed, and Board Rate Packages

SORA-pegged loans – Rates follow the Singapore Overnight Rate Average, plus a bank spread. These can cause your instalments (and thus needed insurance coverage estimates) to fluctuate over time.
Fixed-rate loans – Interest is locked in for 2–5 years. These make it easier to budget and estimate protection needs during the lock-in period.
Board or internal rates – Pegged to a bank’s internal reference rate, which can change at the bank’s discretion.

The chart below shows recent interest rate trends in Singapore:

In recent years, as rates rose from near-zero levels, some borrowers in older HDB towns like Jurong West and Woodlands saw monthly instalments jump by several hundred dollars. For them, having mortgage protection meant their families would not have to sell the flat under distress if the main income earner passed away during this period of higher instalments.

Bank-Linked Mortgage Insurance (MRTA) – How Major Banks Structure It

Most major Singapore banks offer mortgage-reducing or group mortgage insurance that you can take up together with your home loan. Below is a practical overview of how these typically work, based on public bank information and 2026 market practices.[4][5][9]

Key Features to Compare Across Banks

Coverage scope: Death, TPD, terminal illness are standard; some plans may offer riders.
Premium pattern: Single upfront premium, annual decreasing premium, or monthly add-on to instalment.[4][5]
Eligibility: Usually ages 18–65, sometimes limited to borrowers of that bank’s home loan.[5]
Medical underwriting: Some banks (e.g., selected group mortgage schemes) have simplified or no medical underwriting up to certain sums assured, useful if you have minor health issues.[5]

Examples of Bank-Linked Mortgage Protection

DBS, OCBC, UOB and other major lenders typically distribute MRTA or group mortgage plans via their insurance partners. For instance, OCBC’s Group Mortgage Insurance covers outstanding home loans with premiums that automatically adjust as the loan reduces, for borrowers aged 18–65 who have an OCBC home loan.[5]

DBS and other banks offer similar mortgage or term-based protection which can be tailored to your loan amount and tenure.[9] Premiums are usually influenced by your age, health, loan size and remaining tenure, and may be payable by cash; some traditional MRTA plans allow limited CPF usage subject to CPF rules.[1][5]

Insider tip: In practice, when you sit at a bank branch at Tampines or Jurong Point, the banker will often present a loan illustration together with a bundled MRTA quote. Do not feel obliged to accept the first offer – there is usually flexibility to adjust coverage, and you can compare across banks via Homejourney before deciding.