Mortgage Reducing Term Assurance (MRTA) is not transferable to another property! This is what we always heard from most of the people, right? That means the initial Home Insurance – MRTA I bought has been assigned mainly for Property A only. If I buy Property B, another new MRTA is needed. Same for refinance home loan, another new MRTA is required too. Is it true?
Recently, I was explained by a local bank branch manager, she highlights to me that a lot of people are not aware that MRTA is actually transferable in certain conditions. Example: You buy a MRTA for $200,000 property A, after some years, assume your outstanding home loan is $100,000. Therefore, your MRTA coverage will be reduced to $100,000 too as per your outstanding loan (That is why people call it Mortgage Reducing Term Assurance).
Let say you want to refinance home loan of Property A to buy another new Property B at $200,000, in fact you no need to buy new MRTA for $200,000 because now you may transfer the previous MRTA of Property A to your Property B. If you don’t do so by write-in to your bank/insurance company to instruct them to transfer the previous MRTA to your new property, then few thousand dollars might be wasted just like that.
There are so many banks and insurance companies in the market are offering variances of home loan packages and home insurance products like MRTA and MLTA. Terms & conditions, obligation to attach MRTA into home loan have been revising from time to time due to competitive environment among so many companies. Call them and make appointment to meet up with them to find out more details from their home insurance quotation. It helps us to save more money.
Home Insurance Calculator – to calculate how much is the Home Insurance MRTA costs you? Welcome to share with us if you have any good or bad experience in home insurance!
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Hi Horlic,
I refinanced my condominium unit and wish to transfer the MRTA to a landed unit bought recently. The lawyer had on 14/5/2010 advised the refinancier to effect drawdown for redemption of the existing loan. Is it too late now to write in to the bank and insurance company to request for a transfer of MRTA of the condo to my landed property?
Your advise is much appreciared
MRTA attached to condo?
MRTA with which insurer?
Normally, once you settled the MRTA with existing bank, the bank SHOULD inform the insurer about the termination of loan and thus, the insurer SHALL terminate the MRTA and refund you the SURRENDER VALUE accordingly, if any.
Feel free to contact us for consultation. Fee-based.
MRTA is not compulsory, so why do people buy it? i think its absurb that the whole lump sum premium is added into the loan..why bank officers lie to consumer that MRTA is compulsory?? its not!
Elle, it true that it is MRTA is compulsory by law. And it is transferable to the next property or even can be transferred “as a life insurance” on certain cases
MRTA provides some protection to you.
Acroymn : “Mati Rumah Tetap Ada”
My bad, i just noticed that i did a typo, ELLE.
MRTA is NOT compulsory by law