Mortgage Insurance in Singapore: FAQs & Safety Tips | Homejourney

Mortgage Insurance Singapore Do You Need It: Frequently Asked Questions is one of the most common topics Homejourney buyers ask when they start planning their first HDB or condo purchase.

In Singapore, mortgage insurance is not always mandatory, but it is often strongly recommended because it protects your family from losing their home if you pass away, become terminally ill, or suffer total permanent disability while still repaying your housing loan.[1][6] This FAQ-style guide breaks down when you must have mortgage insurance, when it is optional but wise, and how to decide what type and how much coverage you really need.

How this FAQ fits into your overall mortgage planning

This article is a focused cluster that supports our main mortgage protection pillar, How Much Mortgage Insurance Coverage Do You Need: Homejourney Guide.[1] While the pillar dives deep into coverage amounts and strategy, this FAQ concentrates on the most practical question Singapore buyers have: Do I need mortgage insurance, and if so, which type?

As someone who has sat through countless HDB key collections at Toa Payoh and bank loan signings in Raffles Place, I can tell you the confusion is very real: agents mention HPS, bankers promote MRTA, and friends talk about term insurance. Homejourney’s goal is to simplify this with verified, Singapore-specific guidance so you can decide with confidence.

Quick answer: Do you need mortgage insurance in Singapore?

Here’s the short, direct answer many readers look for first:

HDB flat + using CPF OA to pay the loan: Yes, mortgage insurance is mandatory under the CPF Board’s Home Protection Scheme (HPS), unless you are exempted with an approved private policy.[1][6]
HDB flat + paying fully in cash: HPS is not mandatory, but mortgage insurance is still strongly recommended to avoid your family being forced to sell if something happens to you.[1][6]
Private condo, landed, EC (after MOP), or other private property: Mortgage insurance is not compulsory by law, but banks and financial planners usually recommend Mortgage Reducing Term Assurance (MRTA) or term insurance as protection.[1][4][5]
Fully paid-up property: Mortgage insurance is generally not needed anymore, though you may still want separate life or critical illness coverage.

If you are unsure, a simple rule of thumb I use with buyers in Punggol, Bukit Panjang, or Queenstown is: If your family would struggle to service the loan without your income, you probably need mortgage protection.

Key Singapore mortgage insurance terms explained

Before answering specific FAQs, it helps to clarify the jargon you will see in bank documents and CPF letters:

Mortgage insurance / home loan insurance / housing loan insurance: Generic terms for insurance that pays off your outstanding home loan if you die, become terminally ill, or suffer total permanent disability.[1][4][6]
Mortgage Protection: Another umbrella term for these policies, often used by banks and insurers.[4][5]
HPS (Home Protection Scheme): A CPF Board-administered mortgage-reducing insurance that is compulsory for most HDB owners who use CPF OA to pay their monthly instalments, up to age 65 or until the loan is repaid.[1][6]
MRTA (Mortgage Reducing Term Assurance): A private mortgage insurance where the coverage amount decreases over time, mirroring your reducing loan balance. Common for bank loans on condos and landed homes.[1][4][5]
Level term insurance: A separate life insurance policy with fixed coverage that does not reduce with the loan. Many Singaporeans use this instead of MRTA so that there is extra payout beyond just clearing the mortgage.

All of these products exist under the regulatory oversight of the Monetary Authority of Singapore (MAS), which supervises insurers and sets rules to protect consumers.[1][6]

FAQ 1: Is mortgage insurance mandatory for my HDB or condo?

HDB flat (BTO, resale, DBSS)

If you use CPF OA to pay for your HDB monthly instalments, HPS is compulsory unless CPF grants you an exemption because you already have equivalent private coverage.[1][6]
HPS covers you until age 65 or until your housing loan is fully paid, whichever is earlier.[6]
Coverage must at least match your share of the monthly instalment. For example, if you pay 70% of a S$400,000 loan in a 4-room HDB in Sengkang, your minimum HPS coverage is 70% of the loan.[1][4]

Private property (condo, landed, EC post-MOP)

There is no legal requirement to buy mortgage insurance for private properties.[1][4][5]
However, many local banks like DBS, OCBC, UOB, HSBC and Standard Chartered offer MRTA or group mortgage plans and will strongly encourage you to take them up.[4][5][7]
Some banks may factor your insurance coverage into their risk assessment, especially for higher LTV or when one spouse is the main income earner.[3][4]

For a condo buyer in Tampines or Bukit Timah taking a S$900,000 bank loan, it is technically possible to proceed without MRTA, but most families choose at least some form of mortgage protection to avoid forced sales during a difficult time.

FAQ 2: What exactly does mortgage insurance cover (and not cover)?

Mortgage insurance in Singapore typically covers these core events:[1][4][5][6]

Death: If you pass away, the policy pays out to clear the outstanding loan (fully or up to your insured share).
Terminal illness: A severe illness where life expectancy is very limited, as defined in the policy terms.
Total and permanent disability (TPD): You are unable to work again due to disability; definitions vary slightly by insurer.

What it usually does not cover:

Job loss or income reduction.
Partial disability that doesn’t meet the strict TPD definition.
Critical illness like early-stage cancer, unless specifically included in an enhanced plan.
Property damage (that is covered by fire/home insurance instead).[8][9]

This is an important distinction many Yishun and Jurong West buyers miss: mortgage insurance protects loan repayment, not your furniture, renovation, or income. For those, you need separate home contents or income protection insurance.

FAQ 3: MRTA vs HPS vs term insurance – which should I choose?

This is where many Singapore borrowers get stuck. Here is a simplified comparison.

Type	Who it’s for	Coverage pattern	Key pros	Key cons
HPS	HDB owners using CPF OA	Decreasing with loan	Mandatory compliance, paid via CPF, affordable premiums	Stops at age 65, not portable to new properties[1][6]
MRTA	Bank loan borrowers for private or EC properties	Decreasing with loan	Matches loan, often cheaper than level term for same initial sum	No extra cash for family beyond clearing the loan[1][4][5]
Level term insurance	Borrowers wanting broader protection	Fixed sum insured	Can exceed loan, provides extra for family’s living expenses	Premiums usually higher than pure MRTA for same starting coverage