Mortgage insurance in Singapore comes in two forms. If you pay for an HDB flat with CPF, you are usually insured under the Home Protection Scheme (HPS), which clears the loan if you die or become permanently disabled before 65. For private property, or as an alternative to HPS, the options are private decreasing or level term policies.
Which is “best” turns on cost for your age and loan, the shape of the cover, and who you want the money to go to. We do not rank insurers; here is how to compare.
What Mortgage Insurance Protects
It protects the home, not the family’s income. If an owner dies, becomes terminally ill or suffers total permanent disability, the policy pays towards the outstanding loan so the family can stay.
MoneySense lists mortgage reducing term assurance under life insurance. Its term insurance page explains that decreasing term cover reduces and becomes zero by the end of the term.
The Home Protection Scheme
HPS is mortgage-reducing insurance run by CPF Board. The facts below are from CPF Board; our article on DPS and HPS has the detail.
- Who must have it: owners using CPF savings for the monthly instalments on an HDB flat, unless exempted.
- What it covers: HDB flats only.
- Until when: age 65, or when the loan is repaid, whichever is earlier.
- Premium: worked out from the loan amount, loan term, type of loan rate (HDB concessionary or market), age, sex and share of cover. There is no fixed table; use the HPS premium calculator.
- How it is paid: yearly from the Ordinary Account, for 90% of the cover period.
- Payout: straight to HDB or the bank.
The Private Alternatives
Mortgage reducing term assurance (MRTA). A decreasing term policy sized to the loan. The sum assured falls on a schedule set at the start, using an assumed interest rate.
Level term insurance. The sum assured stays flat. As the loan falls, the surplus goes to the family.
Either may be used for private property, and either may support an HPS exemption if it meets CPF Board’s conditions.
| Home Protection Scheme | Private decreasing term (MRTA) | Private level term | |
|---|---|---|---|
| Property | HDB only | Any | Any |
| Sum assured | Follows the insured loan | Falls on a fixed schedule | Stays the same |
| Ends | 65 or loan end | Chosen term | Chosen term |
| Premium paid from | CPF Ordinary Account | Cash | Cash |
| Payout goes to | HDB or the bank | Owner, nominee or estate, unless assigned | Owner, nominee or estate |
| Moves with you to a new home | No, new cover needed | Yes | Yes |
| Compare prices on | CPF Board calculator | compareFIRST or insurer quotes | compareFIRST |
How to Compare Mortgage Insurance in Singapore
Our criteria, in order.
- Does it cover the whole loan, for the whole term? HPS stops at 65. A loan that runs to 67 has two uninsured years.
- Each owner’s share. Under HPS each owner picks a share of cover. The household total must be at least 100%, and each owner may insure up to 100%.
- The interest rate assumed. A decreasing policy’s schedule is built on an assumed loan rate. If your actual rate is higher, the loan falls more slowly than the cover, leaving a shortfall.
- Events covered. Death, terminal illness and total permanent disability are the baseline. Critical illness is an extra.
- Who is paid. A payout to the lender guarantees the loan is cleared. A payout to the family gives a choice, and a responsibility.
- Cost for your profile. Get the HPS figure from CPF Board’s calculator. Get private premiums for the same amount and term on compareFIRST.
- Source of funds. HPS uses Ordinary Account money that would otherwise earn interest or pay the loan. Private cover uses cash.
A Worked Illustration
An illustrative couple, both 35, take a S$500,000 HDB loan over 25 years at the 2.6% concessionary rate. Each pays half the instalment from CPF.
Option A: HPS, 50% share each. If one dies after year 10, when about $340,000 is outstanding, HPS pays about $170,000. The survivor owes $170,000 on one income.
Option B: HPS, 100% share each. The whole $340,000 is cleared. Each owner’s premium is higher, because each insures the full loan.
Option C: a private level term policy of $500,000 each, with HPS exemption. The family receives $500,000. After clearing $340,000, about $160,000 is left for living costs. The premium is paid in cash and is likely to be higher than for decreasing cover.
The outstanding balance is rounded for illustration, and no premiums are shown because they depend on age, sex, health and loan details. This is an illustration only, not a recommendation.
The short version: HPS clears an HDB loan and is paid from CPF, but stops at 65 and covers HDB flats only. Private term cover works for any property and can leave money for the family. Compare the cover shape, each owner’s share and the cost for your own loan.
Getting an Exemption From HPS
CPF Board accepts whole life, term life and endowment policies, life riders, mortgage-reducing term assurance and decreasing term riders. They must cover the outstanding loan for death, terminal illness and total permanent disability for the full loan term or until 65, whichever is earlier.
You apply through your insurer. If the exemption reaches CPF Board within one month of HPS cover being issued, the full premium is refunded to the Ordinary Account; after that it is pro-rated. Policies that are assigned, pledged as collateral or in a foreign currency are among those not accepted.
One caution. Using an existing life policy for exemption means the same money is now doing two jobs: clearing the loan and supporting the family. Check that it is large enough for both, using the protection gap calculator.
Who Each Option May Not Suit
- HPS alone: owners whose loan runs past 65, or who want cover that moves with them to the next home.
- Private decreasing term: borrowers on floating rates who expect rates to rise above the policy’s assumed rate.
- Private level term: households where cash flow is tight and the lowest premium matters most.
- Exemption using an old policy: families who were counting on that policy for income replacement.
Refinancing or moving house changes the sums. Review cover whenever you switch between an HDB loan and a bank loan or change how much CPF goes to housing.
What To Do Next
- Check on the CPF website whether you have HPS and what each owner’s share of cover is.
- Run the HPS premium calculator, then compare private term premiums for the same loan and term on compareFIRST.
- If your loan ends after 65, decide how the last years will be covered.
- Read our term life insurance guide for how level and decreasing cover differ.
