Mortgage Insurance in Singapore: Do You Really Need It? | Homejourney

Mortgage insurance in Singapore is one of those topics most buyers only think about after signing the Option to Purchase – often when the bank, HDB, or CPF Board asks about it. Yet this single decision can determine whether your family keeps your home if something happens to you.

This definitive Homejourney guide explains whether you really need mortgage insurance Singapore, how it works across HDB and private properties, what MRTA and home loan insurance are, and how to decide the right level of mortgage protection for your situation. Throughout, we focus on safety, transparency, and practical advice grounded in Singapore regulations and 2026 market conditions.[1][6]

Executive Summary: Do You Need Mortgage Insurance in Singapore?

Short answer:

Yes, it is effectively mandatory if you buy an HDB flat and use CPF OA to pay your monthly instalments – via the CPF Board’s Home Protection Scheme (HPS).[1][6]
Strongly recommended (though not legally mandatory) if you buy a private condo, landed home, or EC with a bank loan – typically via Mortgage Reducing Term Assurance (MRTA), group mortgage insurance, or a term life policy.[1][4][5][8][9]
Critical if you have dependants, are the main income earner, or are stretching your Total Debt Servicing Ratio (TDSR) limit.

In Singapore, a typical couple buying a S$700,000 HDB in Punggol with a 25-year loan will commit to monthly instalments of S$2,000–S$2,300 depending on interest rates. If one spouse passes away or becomes totally and permanently disabled without adequate housing loan insurance, the surviving family may be forced to sell the flat below market value to clear the bank.[1][4][6] Mortgage insurance exists to prevent that scenario.

What Is Mortgage Insurance in Singapore?
How Mortgage Insurance Works for HDB vs Private Property
Key Types: HPS, MRTA, Level Term & Group Mortgage Insurance
Is Mortgage Insurance Mandatory in Singapore?
How Much Mortgage Insurance Coverage Do You Need?
Costs, Premium Examples & How Banks Structure Mortgage Protection
How Mortgage Insurance Fits with MAS Rules, TDSR & CPF Usage
Real-Life Scenarios: When You Absolutely Should (or Need Not) Buy
How to Choose Between MRTA, Term Insurance and HPS Exemption
How Homejourney Helps You Decide Safely
Frequently Asked Questions (FAQ)

1. What Is Mortgage Insurance in Singapore?

Definition: Mortgage insurance (also called home loan insurance, mortgage protection, or housing loan insurance) is an insurance policy that pays off your outstanding home loan if you die, suffer a terminal illness, or become totally and permanently disabled (TPD) during the policy term.[1][4][6][8]

In Singapore, mortgage insurance is not about protecting the physical building (that is fire or home insurance); it is about protecting your family from losing the property because the loan can no longer be serviced.[4][6][7][8]

In practice, this means:

You take a loan of S$600,000 over 25 years.
You buy mortgage insurance with initial coverage of S$600,000 (or your share if you co-own).
If a covered event occurs, the insurer pays the bank or HDB directly, clearing the loan (or your proportion) and allowing your family to keep the home.[1][4][5][8]

Singapore regulatory context:

The CPF Board administers HPS for HDB owners using CPF OA.[1][6]
MAS regulates private insurers and sets capital and conduct rules.[1][6][9]
Banks (DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, etc.) may offer their own mortgage insurance products or partner with insurers.[4][5][8]

2. How Mortgage Insurance Works for HDB vs Private Property

Whether you are buying a 4-room BTO in Tengah, a resale flat in Bishan, or a condo in Tampines, the mortgage insurance rules differ mainly by:

Property type (HDB vs private)
Whether CPF OA is used
Loan provider (HDB vs bank)

Scenario	Mortgage Insurance Requirement	Typical Product
HDB flat, using CPF OA for instalments	HPS is mandatory unless exempted with equivalent private coverage.[1][6]	Home Protection Scheme (HPS)
HDB flat, paying fully by cash (no CPF)	HPS not automatically required, but still strongly recommended.	HPS (optional) or private MRTA/term insurance
EC during MOP or private condo/landed	No legislative mandate, but banks often encourage protection.	MRTA, group mortgage insurance, or level term life
Fully paid-up property	Mortgage insurance not needed for that property, but life cover may still be useful.	Term or whole life (non-mortgage specific)

Insider tip: For BTO buyers in towns like Punggol, Tengah or Bukit Panjang, HPS enrolment usually happens automatically when you first use CPF OA for HDB instalments – many owners do not even realise they are paying HPS premiums from their CPF until they check their CPF statements.[1][6] Always review your HPS coverage after key life changes like marriage, childbirth, or refinancing.

2.1 HDB Buyers: HPS + CPF OA

If you buy an HDB flat and use CPF OA to service your loan (whether HDB loan or bank loan), you must be covered under HPS unless you are granted exemption based on equivalent private coverage.[1][6]

Key features of HPS:[1][6]

Administered by CPF Board, not by your bank.
Covers death, terminal illness, and TPD up to age 65 or until your loan is fully repaid, whichever is earlier.
Covers at least the proportion of the loan corresponding to your share of instalments – for example, 80% if you pay 80%.[1][4][6]
Premiums are deducted annually from your CPF OA, usually over 90% of the coverage period.[1][6]

2.2 Private Property Buyers: Bank Loans + Private Insurance

For private condos, ECs (after MOP), and landed homes, there is no statutory requirement to have mortgage insurance. However, many banks partner with insurers to offer MRTA or group mortgage insurance that covers the outstanding bank loan.[4][5][8][9]

Examples:

OCBC Group Mortgage Insurance – covers outstanding home loans for death, terminal illness, and TPD, with premiums adjusted automatically as your loan decreases.[5]
DBS mortgage insurance solutions – allow customisable coverage matching your outstanding mortgage, interest rate assumption, and policy term.[8]

As someone who regularly meets buyers in areas like Jurong East and Pasir Ris viewing condos close to MRT interchanges, the pattern is clear: most private buyers with young families opt for some form of mortgage protection because their monthly instalments can easily be S$3,000–S$4,000 for a S$1–1.2 million home.

3. Key Types: HPS, MRTA, Level Term & Group Mortgage Insurance

In Singapore, “mortgage insurance Singapore” usually refers to one of these main options:[1][4][5][6][8][9]

Type	Who It’s For	Coverage Pattern	Key Pros	Key Cons
Home Protection Scheme (HPS)	HDB flat owners using CPF OA	Decreasing with loan balance	Simple, premiums from CPF OA, government‑run	Ends at age 65, not portable to next property
Mortgage Reducing Term Assurance (MRTA)	Private or HDB buyers with bank loans	Decreasing with loan balance	Premiums lower than level term for same initial sum, tailored to loan	No extra payout after loan clears; less flexible if you upgrade early
Level Term Life Insurance	Buyers wanting extra protection beyond loan	Fixed sum assured (e.g., S$1m throughout)	Can cover mortgage + income replacement; portable across properties	Premiums usually higher than MRTA for same initial coverage
Group Mortgage Insurance (bank‑linked)	Bank loan customers (e.g., OCBC)	Decreasing with loan, often reviewed yearly	Convenient, bundled with home loan	Less flexible; may be tied to specific bank or loan

Related deep dives are available in our specialist articles such as MRTA vs Term Insurance: Homejourney Mortgage Protection Guide MRTA vs Term Insurance: Homejourney Mortgage Protection Guide and its FAQs companion article MRTA vs Term Insurance for Mortgage Protection: FAQs | Homejourney .

4. Is Mortgage Insurance Mandatory in Singapore?

The answer depends on your property type and how you fund your instalments.

4.1 When It Is Mandatory

HDB + CPF OA = HPS required
If you own an HDB flat and use CPF OA savings to pay your monthly instalments, you must be covered under HPS unless you are granted exemption.[1][6]

CPF Board confirms that HPS is designed to protect HDB owners and their families from losing their flats if the main breadwinner passes away, suffers a terminal illness, or becomes totally and permanently disabled before the housing loan is fully paid.[6]

You can apply to be exempted from HPS if you have adequate alternative coverage, such as whole life, term insurance, endowment, or MRTA that sufficiently covers your outstanding housing loan.[1][6]

4.2 When It Is Not Legally Mandatory – But Still Wise

For private properties and ECs (after MOP), there is no legislation requiring you to have mortgage insurance. However:

Banks may strongly encourage taking up MRTA or group mortgage insurance as part of responsible borrowing.
If your TDSR is high (near the 55% threshold) or if you are older (late 40s or 50s), insurance is often the only realistic way to ensure your spouse or children are not burdened with a large mortgage they cannot service.[1][6][9]

Many experienced buyers in mature estates like Serangoon and Queenstown deliberately maintain term coverage equal to or slightly above their outstanding loan, especially once they upgrade from HDB to private property and HPS no longer applies.

5. How Much Mortgage Insurance Coverage Do You Need?

As a rule of thumb, the mortgage insurance coverage you need equals your share of the outstanding home loan – typically 100% if you are the sole owner, or proportional if you co-own.[1][2][3]

Examples from Homejourney’s dedicated guide on this topic How Much Mortgage Insurance Coverage Do You Need: Homejourney Guide and How Much Mortgage Insurance Coverage Do You Need: Homejourney Benefits :

Sole owner, S$500,000 loan: Target 100% coverage (S$500,000 decreasing with the loan).[1][2]
Joint owners, each paying 50% of instalments on S$600,000 loan: Each should have at least 50% coverage (S$300,000 each).[1][2][4]
Joint owners, one paying 80%, the other 20%: Recommended 80/20 split in coverage.[1][2][4]

5.1 Simple Step‑by‑Step Framework

Confirm your outstanding loan (e.g., S$720,000 from your latest bank or HDB statement).
Determine your share of instalments (e.g., 70% you, 30% spouse).
Multiply loan x your share – S$720,000 × 70% = S$504,000.
Round up and consider adding 10–20% buffer to cover legal fees or shortfall.

Homejourney’s mortgage calculator at https://www.homejourney.sg/bank-rates#calculator lets you model these numbers in seconds based on your loan amount, tenure, and assumed interest rate, so you can visualise both monthly instalments and protection needs.