MRTA, MLTA... Which is your preference?
Mortgage insurance also come in different types. At present, there are two: the Mortgage Reducing Term Assurance (MRTA) and the other one is the Mortgage Level Term Assurance (MLTA).
MRTA vs MLTA
To start you off; here's the differences between the two insurance types.MRTAMLTAPurposeProtectionProtection, Savings and/or cash valueCoverageCovers the outstanding housing loan on a decreasing sum assured basis
Covers the outstanding housing loan on a fixed level sum assured basisPaymentLump sum payment by cash or financed into housing loanPaid periodically on a monthly, quarterly, semi-annually or annual basisTotal PremiumLowerHigherNominationBank is the beneficiaryAnyone can be the beneficiaryTransferabilityNoYesSuitable for*Where buyer aims to own the house in a longer termWhere buyer is expected to sell the house in short-term
*The line on suitability is just a suggestion. As always, you’re welcome to choose whichever makes you comfortable. After all, insurance is supposed to make you feel comfortable in the event of a calamity.