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Mortgage Loan Insurance in Singapore: HPS vs MRTA Explained (2026)

Mortgage loan insurance in Singapore in 2026: when the HDB Home Protection Scheme is compulsory, how MRTA differs, what they cover, and what each leaves out.

By Propwise EditorialUpdated 2 October 20266 min read

How we made this. Updated for 2026 with AI-assisted research. Figures are linked to their sources — check them before you act.

Mortgage loan insurance pays off your home loan if you die, are diagnosed with a terminal illness or become totally and permanently disabled. In Singapore there are two main kinds. The Home Protection Scheme (HPS) is for HDB flats and is compulsory if you use CPF for the monthly instalment. Mortgage Reducing Term Assurance (MRTA) is for any home and is optional. Neither covers your home against fire. That is a separate policy.

At a glance

  • HPS is run by CPF. It covers HDB flat owners until age 65 or until the loan is repaid, whichever comes first. You must have it if you pay your instalment with CPF.
  • MRTA is a private term insurance. The banks’ association says it is not mandatory when you apply for a housing loan.
  • HPS does not cover private homes or ECs. Only HDB flats qualify.
  • Both are decreasing-cover policies. The sum insured falls as the loan falls, so they protect the loan, not your family’s living costs.
  • Fire insurance is different. Your bank requires cover on the building, and that has nothing to do with your health.

Why the loan survives you

A mortgage is a debt secured on your home. If you die, the bank is still owed the balance. Your family can keep paying, refinance, or sell. If the loan is in joint names, there is a further risk. Many loan agreements make borrowers jointly and severally liable, which lets the bank claim the whole balance from the surviving borrower. Insurance that clears the loan removes that risk. The cost is a premium, and the cover is narrow by design.

HPS: the HDB flat scheme

CPF describes the Home Protection Scheme (updated 18 March 2026) as mortgage-reducing insurance for HDB flat owners. These are the rules that matter:

  • Who must join. Anyone using CPF savings to pay the monthly instalment on an HDB flat. People who pay in cash are not forced to join, but CPF encourages them to do so if they have no other cover.
  • What it covers. Death, terminal illness and total permanent disability (TPD). It applies to both HDB loans and bank loans for the flat.
  • Until when. Age 65, or until the loan is fully repaid, whichever is earlier.
  • Premiums. Charged yearly and deducted from your OA. Each owner can choose a share of the loan to cover, up to 100%. Use CPF’s premium calculator. It needs your date of birth, loan size, rate type and term. CPF warns that actual premiums may differ if you have pre-existing health conditions.
  • Exemption. You can apply to be exempt if you already hold private cover for the outstanding loan, such as whole life, term life, an endowment, a life rider or MRTA, that runs for the loan term or until age 65, whichever is earlier.
  • Health. Cover is subject to approval. If you cannot get HPS because of a serious medical condition, CPF says you may still use CPF for your instalments and should consider private insurance.

What changed since 2015

The earlier version of this article said that HPS ends when you refinance, so you need to start again. CPF now says HPS cover adjusts automatically when you refinance, with no new application. It ends when you sell the flat or repay the loan in full. (If you repay a bank loan with cash, tell CPF.) The earlier version also said you pay premiums for only 90% of the cover term. CPF’s current summary does not state a shorter payment term, so check your own certificate.

What HPS pays

Under CPF’s claims rules (updated 7 August 2025):

  • Death. The outstanding loan goes to HDB or the bank. Any excess goes to your OA and then to your nominees or heirs.
  • Terminal illness or TPD. CPF can cover your instalments for up to two years. After that, the remaining sum insured may be paid as a lump sum, after review.
  • Exclusions. In the first policy year, claims for suicide, self-inflicted injury and criminal offences are denied. Pre-existing conditions listed on your HPS certificate are excluded. So are claims based on false information, war and riots.

MRTA: the private option

MRTA is term insurance sold by insurers. Like HPS, it pays out on death, TPD or terminal illness, and the sum insured falls with your loan. Unlike HPS, it covers any home, including private condos and landed homes. The insurer sets the premium. The banks’ association states that you do not have to take it when applying for a loan. A bank or insurer may offer it with your loan, but you can say no.

Policies differ. Ask the insurer: does the cover follow your actual loan balance or a fixed schedule? What happens if you refinance, prepay or sell? Can the policy cover two borrowers? Is there a waiver of premium if you become disabled? The answers decide whether an MRTA suits you, and they are in the policy document, not the sales leaflet.

Compare the policies

HPSMRTAFire insurance or MIP
What it protectsYour life and health, for an HDB loanYour life and health, for any home loanThe building
Required?Yes, if CPF pays your HDB instalmentsNoYes, from the bank (see below)
Pays out onDeath, terminal illness, TPDDeath, terminal illness, TPDDamage from fire and other insured events
PremiumDeducted from your OASet by the insurerSet by the insurer
Cover endsAge 65, loan repaid or flat soldPer policyPer policy (the bank needs cover for the loan term)

Source: ABS guide, Appendix A, and CPF.

Fire insurance and MIP: not optional

The banks’ association says your bank will require fire insurance on the property for the loan’s full term. Some banks require a Mortgagee Interest Policy (MIP) for a private apartment instead. You do not need both. You may choose your own insurer, but the bank may charge an annual administration fee if you do not use its recommended insurer. A condo’s management corporation also takes out its own fire policy, but that covers the building, not your renovations or contents.

Worked example: how the cover shrinks

Say you borrow S$600,000 over 30 years at 1.8% for a private home. This rate is an example within today’s floating range of about 1.5–1.8%. The monthly instalment is about S$2,158. The balance, and so the cover you need, falls like this:

AfterLoan balance
5 yearsabout S$521,000
10 yearsabout S$435,000
20 yearsabout S$237,000

The balance falls slowly at first. After 10 years, you still owe about 72% of the loan. A decreasing policy is cheap because it assumes this fall. If you prepay or refinance, the policy’s schedule may no longer match your loan. Use our mortgage calculator to see your own balance.

What mortgage insurance does not do

It clears the loan. It does not pay your family’s living costs, your children’s fees or your other debts. It does not pay if your income falls because of job loss. If your income supports dependants, compare the policy with a level term plan that pays a lump sum. This is a question of how much protection you need, not of which policy name is best. If you are not sure, speak to a licensed adviser.

Bottom line

For an HDB flat, HPS is compulsory if CPF pays your instalments, and you can apply for an exemption if you already hold qualifying cover. For private property, MRTA is optional, and it competes with term life you may already have. Check what each pays, until when, and how it handles a refinance. Then check the fire insurance your bank will insist on. For more on loan terms, see our guide to home loan terms, the HDB home loan guide and how to choose a mortgage.

Sources

mortgage insuranceinsurancehousing loanhdb loanhome loan

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