MRTA Vs MLTA - Which One Is The Best Housing Loan Insurance

MRTA vs MLTA - Which One Is The Best Housing Loan Insurance?
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Home Property MRTA vs MLTA Which One Is The Best Housing Loan Insurance?
What is MRTA / MLTA?
Basically, both Mortgage Reducing Term Assurance (MRTA) and Mortgage Level Term Assurance (MLTA)
are functioning as a protection for borrower by helping them to settle their outstanding mortgage loan in the
event of something bad happens. In other words, it is mortgage insurance.
What are the Differences Between MRTA and MLTA?
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How to Determine Buying MRTA or MLTA is The Best?
Step 1: Identify the purpose of buying the property, whether its for self-occupying or investment because that
will determine how long you are going to hold the property.
Step 2: Analyse the best protection coverage needed, which is sufficient to ensure your spouse will not get
into financial trouble for the monthly mortgage installment. In order to minimize the costs, it might not be
necessary to have full coverage (same as total housing loan amount) as you might have other backups (eg.
savings, cash, other insurances, shares etc).
Step 3: Do some calculation and comparison to have clearer picture on the costs involved and affordability on
the premium, respectively.
Example 1: Buying MRTA
Total Loan Amount = RM 106,155

Loan Tenure = 30 years
Age = 25 years old
Coverage Ratio (%) = 100%
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Coverage Amount = RM 106,155

MRTA Premium = RM 2,371.50
Payment Option 1: One Lump Sum Payment Upfront
Since it is one lump sum payment upfront, hence, no interest is charged
Payment Option 2: Financed into Housing Loan
Assume BLR 1.8% = 4.25%
Assume Loan Tenure = 30 years
Monthly Installment = RM 11.66
Total Interests Paid = RM 1,824.84
Total Payment = RM 4,196.34
Example 2: Buying MLTA
Total Loan Amount = RM 106,155

Age = 25 years old
MLTA Premium = RM 74.30/month = RM 891.60/year
3 years x RM 891.60/year = RM 2,674.80
6 years x RM 891.60/year = RM 5,349.60
9 years x RM 891.60/year = RM 8,024.40
12 years x RM 891.60/year = RM 10,699.20
Example 3: Comparison Between MRTA and MLTA (Buying Properties for Investment)
Example 4: Comparison Between MRTA and MLTA (Buying Property for Own Stay)
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For more comparison of MRTA charges on the varies loan amount, try this MRTA Calculator from
www.fiscal-wise.com.my
Read More Transfer MRTA To Another Property To Save Money For Home
Insurance
{ 48 comments read them below or add one }
Kris
Hi Horlic,
How do you calculate the MLTA premium? I am not sure how to get the RM74.30 per month.
Kris.
Reply
Horlic Lim
I got the quotation from insurance company for the MLTA premium charges.
Reply
s.k.v
can i know which company sir?
Reply
FinanceFree
thanks for the details on mrta and mlta. now i know what the different. if you can provide more details
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on how to choose, much appreciated.

Reply
aramaite
Thanks for the explanation.I am having a problem getting an MRTA. Recently rejected by an insurance
company due to health problem and overweight. Is there any alternatives to this? Already bought a
house and having ths problem.I do not want to burden my family if something bad happened (I am the
sole breadwinner).
Reply
Loke
U can try to buy Life Insurance Financing from other insurance companies..
Try to ask a few, some might offer to u
Reply
Sharmilla Chee
hi aramaite
if you do not mind me asking, what kind of health problems u have?
For your info, i am working for my uncle in Tokio Marine. We have this great life ins+ mrta plan
which will cost only about RM 1000 per YEAR! Right now we also give rebate worth RM 100.
very suitable for sole breadwinners like you.
For further info, pls contact me at 016 978 9285 or sharmilla_487@hotmail.com.
Thank you
Reply
Sui H Lim
We just bought a condo and understood the MRTA is compulsory and that in an event of an
untimely death, the MRTA will cover the outstanding balance of the house. So we think that it will not
burden the surviving family. Now I have come to understand that even though, the family is free from
making the mortgage payments, the property is NOT entitled to the family. It will remain with
insurance company until the family comes out with the outstanding balance. How about that!
Reply
Sharmilla Chee
12/1/2015 6:56 PM
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Hi sui.
That depends on the type of the insurance plan that you buy. If it is a life insurance, the house
will definitely go to your family since the sum assured of your plan will be used to pay for your
house.
For your info, i am working for my uncle in Tokio Marine. We have this great life ins+ mrta plan
which will cost only about RM 1000 per YEAR! Right now we also give rebate worth RM 100.
For further info, pls contact me at 016 978 9285 or sharmilla_487@hotmail.com.
Thank you
Reply
Rose
Hi, i got MRTA but was told tat in the event of TPD/Death, it would help to cover the whole cost, thus
beneficiary would be the family members. But, what I dun understand is why you stated the beneficiary
is the bank? Please kindly clarify, TQ.
Reply
Horlic Lim
For MRTA, if anything happens, it would cover your outstanding housing loan directly (pay
direct by MRTA company to the bank).
For MLTA, u can assign anyone to be your beneficiary, if anything happens, he/she will receive
the money and use it accordingly. More flexible usage on the lump sum money.
Correct me if Im wrong.
Reply
kent
For MRTA, if anything happens, it would cover your outstanding housing loan directly (pay direct by
MRTA company to the bank). but family needs to fork out any difference in amount depending on the
market value. rite?
Reply
May
Kent, for MRTA.. the protection reduce accordingly and approximayely.. yeah.. if the person died, the
balance still need to settle.
but is the person diagnosed one of the critical illnesses, the loan will still need to continue to serve..
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bcos usually mrta dun cover illnesses. always thias will lead to major financial contraint.
If MLTA any of these happens, death totall prmanentl disable, or critical illnesses, it will be settle.
not only that usually MLTA also consist of reduce protection, increase protection or flat protection. but
all 3, u will still get back some money or all money u pay for or all plus xtra bonus. it really depend on
what u r looking for n your budget..
Reply
Rose
Let say me and my partner both insured 100% MRTA coverage. In the event something happened,
MRTA will be paid to bank and the partner no need hassle to pay anything else, right? And the property
will belong to the partner right and not bank? Please advise. TQ
Reply
Chong Kong Hui

Hi,
I am the Mortgage Consultant as well as the guy selling MRTA or MLTA.
# 10 If both insured for 100%, I call it over-insured. Yes, the bank will get the money that equal to
outstanding loan (assuming the MRTA purchased correctly and installment paid accordingly). The loan
settled, property belongs to the surviving partner. (simple assumption that it is join name, no other
beneficiary)
# 9 MLTA does not necessarily covers 36 Critical Illness. Normally NO. Unless it is ADDED as a
RIDER into the policy. But it can be very expensive. Beware, there are TWO type of rider, One is pay
you once diagnosed 36 CI, the other is waive the premium so you dont have to continue paying the
premium BUT it will NOT settle the loan.
# 8 A bit correction. It is not the family need to folk out the different of the Market Value but the
different between the insurance proceeds vs the outstanding balance of the loan. If designed perfectly,
no additional loan applied, interest rate dont change significantly the insurance proceeds will be
almost = outstanding balance of the loan.
# 7 Totally correct.
# 6 The ultimate beneficiary is still the family member because they can own the property without
further instalment payment or settlement of the loan BUT the DIRECT beneficiary of the insurance
proceeds is the Bank.
# 5 You are either confusing with your fact or confused by agent/banker. Insurance company dont
want to own the property. They will pay to BANK upon claim. Your family just need to settle the
different, IF, the insurance proceeds is insufficient.
# 4 Try all insurance company is Malaysia. IF you are NOT HIV+, chance still can get MRTA
coverage, may be at higher premium.
# 3 Ask for advice. Fee based RM100/hour. Call 019-243 6946 to make appointment. Fee is 100%
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refundable if a product is sold.

# 2 It is cheaper than mine. However, please advise the CASH VALUE. My policy offer
GUARANTEED CASH VALUE. It is NON-PARTICIPATING.
# 1 Always ask for quotation from Agent.
Reply
aaron
Hi everyone.
I just signed S&P for a condo that Im buying as an investment. But still undecided whether to choose
MLTA or MRTA.
Lets say Im planning to sell of the condo in 10 years time, which would be a better choice, MLTA or
MRTA?
Thank you.
Reply
louise yap
reply to aaron.
hi, im a financial consultant. i do provide consultation services regarding to any insurance,financial
management, will management and ect.
to protect your personal detail, i suggest u to email me directly, i can give some idea to u how to choose
mrta or mlta for your home loan.
this is my email add. louisyap18@hotmail.com
Reply
serina
hi all,
so that means after readong from the above statement, a person who is HIV+ will never be able to get
housing loans ? since MRTA is compulsory
Reply
louise yap
reply no serinA
12/1/2015 6:56 PM
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Some bank do not compulsory borrower to purchase mrta to process their loan.funtion of mrta or mlta
is to cover any debts remain when the borrower face any death or tpd. housing loan and mrta or mlta is
different story,hiv person can apply loan,only insurance they maybe hard to apply only. so the person
without mrta must take their on risk in cover the debts if any thing happen.
Reply
Chong Kong Hui

@Louise yap
In fact, due to competition, most bank do not impose MRTA or MLTA now!
I am a mortgage broker.
http://www.ChongKongHui.com
Reply
james
Dear Chong Kong Hui,
Which bank does not impose MRTA or MLTA?
Thanks.
Reply
Kong Hui
Almost all banks.
Some still try to encourage customer to buy MRTA by offer better rate e.g. No MRTA
BLR-2.40% and with MRTA BLR-2.45%
Reply
Confused
Im still undecided after all the rubbish u guys presented. Im sure Im not the only one. Can anyone
give examples of when to buy MRTA and when to buy MLTA please? Eg
1. Property is for Investment?
2. Home owner is gay, never plan to get married n have kids (single n no HIV)?
3. Home owner has 9 kids n the sole bread-winner of the family?
4. Home owner is young, making a decent living n living dangerously but planning to get married
soon?
Seriously, examples in simple English please. Thank u.
Reply
12/1/2015 6:56 PM
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amber
Total Shop Loan Amount = RM 200,000
Age = 29 years old
MRTA Premium = RM 2,900
Total interest amount for 20 years= RM100,000
my total settlement to banker = RM300,00(prinsipalRM200,000+ interestRM100,000)
ive paid RM100,000 to the banker, if something bad happen, how much is MRTA going to cover?
what is mean by outstanding balance of the loan? (remaining prinsipal RM100,000 + interest?)
Reply
Mr Johnson Williams
Hi do you need a loan,if yes contact us via: johnsonwilliams610@gmail.com
with your full name,loan amount,phone number,country and state of residence
to apply for a loan..
Reply
raymond
powerlink can solve the problem of MRTA.. can save ur money as well
how to do me, contact me at raymondneng@yahoo.com
Reply
Loke
Anyone looking for house refinancing? and MRTA / MLTA advice kindly contact me I am dealing
with Great Eastern and OCBC
loke.voo.ho@ipp.com.my
Reply
carl
my house price is 400k, so how much MLTA will cost me?
Reply
12/1/2015 6:56 PM
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Kelvin lee
Hi carl, I am Kelvin lee, from one mortgage solution. Regarding how much is the premium for MLTA
400k. That have 2 type. Mortgage save and mortgage flexi . For detail, pls email direct to
Kelvin6108@yahoo.com.
Reply
gressen
Hi all, recently I met up with the loan consultant for a propery which Im buying to discuss the various
loan plans. When we came to the topic of MRTA & MLTA, I told her that I would like to consider
before deciding as Im not sure if the property will be kept for own use or sold off eventually. Her
response was that I HAVE to decide by today as she has already sent up a memo.
May I know what did she mean by that? & was it right of her to insist that I make a decision there &
then? Since I have already signed the insurance application form, can I refuse to pay the premium in the
event it is approved?
Kindly advise as this is my first time purchaing a property. Thanks.
Reply
Horlic Lim
if she is approaching u to go for MLTA, i believe that she might doing part time as insurance
agent at the same time, u know la, commission thing. if u feel uncomfortable with her altitude,
complaint to the bank!
i believe there is a cooling period (eg. you may still call off the deal within certain days after u
confirm/bought something) for your insurance, check with the company, not the girl.
Reply
Kong Hui
I sell low premium high protection MLTA.
Most other sell high premium high commission MLTA.
It is hard to survive if I keep selling low premium-high protection but faith and belief keep
me alive. (as well as source of income from cross-selling).
Reply
AskChong
12/1/2015 6:56 PM
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I am in same business, Mortgage and Insurance. Sorry that you have met a desperate agent. My
approach is open discussion, bad for me if customer dont buy MLTA from me. (usually
cost-sensitive and/or less protection-sensitive).
Reply
gc
you are man
i am shocked to see this blog
well done
really salute you for teaching and guiding
need to pay or donate for your blog ?
Reply
Brian Tan
Dear all, the RM 74.30 per month is based on your premium. Example: you are 26years old , based on
your age, the insurance company can cover RM105.155. If u need more details can email me, I will
explain for u. Brian_tan@live.com
Reply
Brian Tan
Dear all, the RM 74.30 per month is based on your premium. Example: you are 26years old , based on
your age, the insurance company can cover RM105.155. If u need more details can email me, I will
explain for u. Brian_tan@live.com
Reply
kejora
pls call aflah 012-3685844 for islamic MLTA (shariah compliance)
Reply
kejora
for my advise.. you must study yrself benefit MLTA/MRTA or yr get app more consultant insurance
and yr decide which one yr get protection.
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example:
age male:30 year
Loan :rm400k
tenure 35 years
Islamic MLTA Cover: 35 year
Death & TPD cover to age 65
Annual premium: RM2,200.00
pls call 012-3685844
aflah
Reply
Rahman
Hi
nak tanya sikit tentang MRTA
Age : 40
Loan :Rm76K
Tenure 30 years
berapa bayarannya ?
Thanks.
Reply
kejora
Salam..en rahman..i want sharing mltt with hibah..pls email:
azlaneo@yahoo.com.my..foc..sharing
Reply
bro mark
hi,,want to ask..im want buy mlta,,but ist there any bank that want to accept mlta..since i have a life
policy that cover,,with prudential,,,because the bank only accept their own insurance mrta..please help
Reply
kelvin Lee
HI Bro Mark,
Now a day , bank is not compulsory borrower taken MRTA. They give customer optional. But if
you choose MRTA, of course each bank have their panel insurance company. If you purchase
MLTA , some bank will ask for assignment. All the procedure i can help to solve. Do not ever
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assign your personal life insurance to bank , because the beneficiary will automatically change to
bank. Feel free to ask for advice. email me directly kelvin6108@yahoo.com
Reply
esther lee
dear all, you can email me regarding mlta matters at sheok0@yahoo.com.
thanks .
Reply
Cnng
MLTA loan amount rm350,000. Born 2jan 1975. Tenure for 15 year. What is the yearly installment and
return value. If I plan to settle the housing loan in 10 years time.
Reply
Ho
Since you are discussing about Insurance. Can someone highlight me on this subject of insurance on
fire on apartments. Ive this case of paying lump sum for the insurance on buying the property.On
Government loan. Now the management company of the apartment wanted me to pay for their
insurance as well. Your expert comment please.
Reply
kejora
For inquiry..islamic mlta/mltt foc sharing..pls email azlaneo@yahoo.com.my
Reply
kejora
For islamic mlta shariah compliant..pls email to azlaneo@yahoo.com.my..free sharing
Reply
kejora
For islamic MLTA (MLTT) pls email foc sharing
12/1/2015 6:56 PM
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Mazlan aflah
Reply
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