Upon taking up a housing loan, you’ll be advised to take up a mortgage insurance. So, what is the difference between MRTA, Mortgage Reducing Term Assurance and MLTA, Mortgage Level Term Assurance?
MRTA and MLTA are both mortgage insurance, their end goal is the same, which is to cover your loan, if something unfortunate happens to you.
MRTA is the most commonly found offered by banks. It is a one-off premium and a reducing sum assured along the years. For example, your loan is RM 500,000, same goes as your MRTA sum assured RM 500,000 as well. Along the years, your RM 500,000 will reduce according to your outstanding. In the event when you’re no longer around or disabled, the MRTA will pay the outstanding balance of your loan to the bank, and your family will get the house. MRTA is non-transferable, you can not transfer the MRTA to another property, and MRTA has no cash value/return/savings, at the end of the term, you will not receive any money from the MRTA.
MLTA is slightly different from MRTA, the sum assured does not reduces like the MRTA and it has cash value/savings/return at the end of the period. For example, RM 500,000 is sum assured amount, few years later, you’re no longer around, your family/beneficiary will receive the RM500,000 to pay off the remaining loan and whatever balance from that will be for personal used. MLTA is transferrable to any other property of the same owner, MLTA follows the owner, MRTA follows the house. When the MLTA matures, the owner will receive the cash value/savings/returns from the policy.
MRTA and MLTA are both mortgage loans with slight different features, by talking to us, we will give further in-depth explanations to suit your needs.