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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?

How to Determine Buying MRTA or MLTA is The Best?

Step 1: Identify the purpose of buying the property, whether it’s 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%
  • 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
  • Loan Tenure = 30 years
  • Age = 25 years old
  • Coverage Ratio (%) = 100%
  • Coverage Amount = RM 106,155
  • 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)

For more comparison of MRTA charges on the varies loan amount, try this MRTA Calculator from www.fiscal-wise.com.my

64 thoughts on “MRTA vs MLTA – Which One Is The Best Housing Loan Insurance?”

  1. Kris
     ·  Reply

    Hi Horlic,

    How do you calculate the MLTA premium? I am not sure how to get the RM74.30 per month.

    Kris.

    • Horlic Lim
       ·  Reply

      I got the quotation from insurance company for the MLTA premium charges.

      • s.k.v
         ·  Reply

        can i know which company sir?

  2. FinanceFree
     ·  Reply

    thanks for the details on mrta and mlta. now i know what the different. if you can provide more details on how to choose, much appreciated.

  3. aramaite
     ·  Reply

    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).

    • Loke
       ·  Reply

      U can try to buy Life Insurance Financing from other insurance companies..
      Try to ask a few, some might offer to u

    • Sharmilla Chee
       ·  Reply

      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

    • sajitkumar
       ·  Reply

      Hi, Dear,
      May be i can give you some advises, because i am also waiting for MRTA claim

  4. Sui H Lim
     ·  Reply

    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!

    • Sharmilla Chee
       ·  Reply

      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

  5. Rose
     ·  Reply

    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.

    • Horlic Lim
       ·  Reply

      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 I’m wrong.

  6. kent
     ·  Reply

    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?

    • Sean
       ·  Reply

      Kent, you’re right.

  7. May
     ·  Reply

    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.. 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..

  8. Rose
     ·  Reply

    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

  9. Chong Kong Hui
     ·  Reply

    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 don’t 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 don’t 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 don’t 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% 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.

    • ramesh
       ·  Reply

      Im interested in MLTA… pls provide me more info on this matter and which bank or insurance company provide this product… tq

    • Max
       ·  Reply

      #10 Malaysia has no surviver clause, disease person’s share will distribute to beneficiaries according will or distribution act(without will). It’s not automatic belong to surviving partner even is joint name.

  10. aaron
     ·  Reply

    Hi everyone.
    I just signed S&P for a condo that I’m buying as an investment. But still undecided whether to choose MLTA or MRTA.
    Lets say I’m planning to sell of the condo in 10 years time, which would be a better choice, MLTA or MRTA?

    Thank you.

  11. louise yap
     ·  Reply

    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

  12. serina
     ·  Reply

    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…

  13. louise yap
     ·  Reply

    reply no serinA

    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.

    • james
       ·  Reply

      Dear Chong Kong Hui,
      Which bank does not impose MRTA or MLTA?
      Thanks.

      • Kong Hui
         ·  Reply

        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%

  14. Confused
     ·  Reply

    I’m still undecided after all the rubbish u guys presented. I’m sure I’m 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.

  15. amber
     ·  Reply

    Total Shop Loan Amount = RM 200,000
    Loan Tenure = 20 years
    Age = 29 years old
    Coverage Ratio (%) = 100%
    Coverage Amount = RM 200,000
    MRTA Premium = RM 2,900
    Total interest amount for 20 years= RM100,000
    my total settlement to banker = RM300,00(prinsipalRM200,000+ interestRM100,000)
    i’ve 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?)

  16. Mr Johnson Williams
     ·  Reply

    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..

  17. raymond
     ·  Reply

    powerlink can solve the problem of MRTA.. can save ur money as well
    how to do me, contact me at raymondneng@yahoo.com

  18. Loke
     ·  Reply

    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

  19. carl
     ·  Reply

    my house price is 400k, so how much MLTA will cost me?

    • Max
       ·  Reply

      There few factors affect the premium of MLTA

      1. Gender
      2. Age
      3. Health conditions
      4. Type of insurance: term(might be cheapest), endowment(most expensive), investment-link.

  20. Kelvin lee
     ·  Reply

    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.

  21. gressen
     ·  Reply

    Hi all, recently I met up with the loan consultant for a propery which I’m 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 I’m 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.

    • Horlic Lim
       ·  Reply

      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.

      • Kong Hui
         ·  Reply

        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).

    • AskChong
       ·  Reply

      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 don’t buy MLTA from me…. (usually cost-sensitive and/or less protection-sensitive).

  22. gc
     ·  Reply

    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 ?

  23. Brian Tan
     ·  Reply

    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

  24. Brian Tan
     ·  Reply

    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

  25. kejora
     ·  Reply

    pls call aflah 012-3685844 for islamic MLTA (shariah compliance)

  26. kejora
     ·  Reply

    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.

    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

    • Rahman
       ·  Reply

      Hi
      nak tanya sikit tentang MRTA
      Age : 40
      Loan :Rm76K
      Tenure 30 years
      berapa bayarannya ?
      Thanks.

      • kejora
         ·  Reply

        Salam..en rahman..i want sharing mltt with hibah..pls email: azlaneo@yahoo.com.my..foc..sharing

  27. bro mark
     ·  Reply

    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

    • kelvin Lee
       ·  Reply

      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 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

  28. esther lee
     ·  Reply

    dear all, you can email me regarding mlta matters at sheok0@yahoo.com.
    thanks .

  29. Cnng
     ·  Reply

    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.

  30. Nadira Nasir
     ·  Reply

    Can someone please advise and help me to calculate :

    Age 49
    Loan rm 1,000, 000
    Tenure 25 years

    How much? and what is the best plan tht can give low premium mthly pymt.

    Thank you.

  31. Nadira Nasir
     ·  Reply

    Can someone please advise and help me to calculate :

    Age 49
    Loan rm 1,000, 000
    Tenure 25 years

    How much? and what is the best plan tht can give low premium mthly pymt.

    Thank you.

  32. Ho
     ·  Reply

    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.

  33. Akmal PRU
     ·  Reply

    Looking for MLTT (Takaful) ??
    Coverage:
    Death, TPD, Critical Illness, Family Income Benefit

    Please SmS@Whatsapp me for FREE Quotation
    0143381377 @ 0123141884
    Akmal
    Takaful Consultant

  34. Thamil Maran
     ·  Reply

    Hi all,
    I got a question here.

    According to my friends said if the house owner passed away in year 5. Lets say he bought the MRTA plan, 100k loan, 30 years. And the spouse is housewife, does the spouse need to pay the few monthly repayment continuesly?

    Example : Husband passed away on June 2014

    So in order to get the claim from the insurance company is te wife need to pay for month July, August, September??? Because my friend told you need to pay minimum 3 months consecutive payment in order the insurance company pay the bank. Please advice. Thanks

  35. Loo
     ·  Reply

    Hi, im first time buy a new developer house, it need construction 3y plus period. I use it own stay. I still confused of choosing mrta or mlta.
    My loan is 487,000k
    Tenure is 30k
    Interest rate 4.45%
    can guide me some idea ?
    Thank you

  36. kejora
     ·  Reply

    For islamic MLTA (MLTT) pls email foc sharing

    Mazlan aflah

  37. kejora
     ·  Reply

    Mortgage Level Term Takaful (MLTT) Package with Amanah Trust (Badal Haji, Korban ,Wakaf ) & Nomination Hibah…pls email to azlaneo@yahoo.com.my

  38. kejora
     ·  Reply

    for islamic mlta minima 5 years protection
    pls..email azlaneo@yahoo.com.my or pls.sms 012-3685844

  39. kejora
     ·  Reply

    MLTA : option MRTA/MRTT

    Contoh:EN AHMAD MEMBELI RUMAH RM1JUTA
    UMURNYA 30 TAHUN FINANCING 40 TAHUN
    PERLINDUNGAN= RM1JUTA
    BAYARAN MONTHLY= RM662
    BAYARAN TAHUN= RM7,350

    Mazlan Aflah
    Takaful Adviser/Mortgage Planner
    email; azlaneo@yahoo.com.my

  40. kejora
     ·  Reply

    MLTA/MLTT PLAN ( PROTECTION + SAVING + INVESTMENT+BADAL HAJJ+KORBAN+WAKAF+HIBAH) PLS EMAIL TO azlaneo@yahoo.com.my FOC SHARING

  41. Pal
     ·  Reply

    Can anyone send me quotation for MRTA?

  42. kejora
     ·  Reply

    MLTA Package with Income Replacement

    CONTOH UMUR 31 TAHUN
    LELAKI
    COVER 30 TAHUN
    Monthly Premium (Protection Only)RM290

    Khairat Kematian within 24 hours (Funeral expenses) 2,000
    Additional Khairat (for upah haji, zakat, lawyer fee) 5,000
    Death (any cause including illness or accidental) 500,000
    Total Permanent Disability -TPD (any cause) 500,000
    Diagnosed with 46 Critical Illness 200,000
    Extra Accidental Death/TPD worldwide 50,000
    Extra Accidental Death/TPD in Arab Saudi 100,000
    Daily Hospital Allowance 200

    pls..email azlaneo@yahoo.com.my or pls.sms 012-3685844

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