4.1K is annual or 1 time deal ?
sorry, I'm noob for mrta / mlta.

It's one time payment.Either you choose finance into the loan or you pay by cash yourself. Please take note that all MRTA is not transferable. Meaning everytime you refinance or sell of the property, You have to buy another new MRTA to replace it and will be quote higher price as your age go up. Any question or quotation feel free to ask me. I'll be glad to help everyone here.

This post has been edited by onnying88: Aug 16 2009, 09:12 PM

As far as i know, MRTA is 1 time pay, either cash or finance into loan amt.
But MLTA is paid on a monthly, quarterly, half yearly or yearly basis.

But the OCBC agent told me, OCBC have MLTA 1 time pay off. Anyone can clarify this?

Normal MLTA also can 1 time pay off which is by full payment, but the price will be . Of cause there will be some discount if you do full payment for MLTA.

I would like to know the OCBC MLTA also. If the premium is around the same with MRTA, then it's good news to everyone.

hi,

prudential quote rm878 monthly for 20 years to cover for the loan amount 800k. if let's say end of the day nothing happens.. will get back only 140k.

if take the mrta would be 45k.

which one is more worth it ??
or is there other insurance that have better offerings than prudential ??

Can pm me your D.O.B? I can make a quotation from Hong Leong Assurance for you to compare.

Here is a example of quotation for a 30years old client with RM800k level coverage. Which mean through out 20years also cover for RM800k.
Monthly payment = RM 745.50
Total payment for 20years = RM178,920
Surrender value at 20years = RM202,704 (Guaranteed)
Break even years at 16 years. Because surrender value at 16 years = RM151,448 (Guaranteed)
while your total payment for 16years= RM745.5 x 12mth x 16yrs = RM143136.

This policy can be use for up to age 100 and can continue serve as a policy even you refinance in the future while MRTA will be burn and have to buy again.
This policy have have break even years of around 15years. So that you get back what you pay for this insurance in shorter time in case you settle the loan in shorter time.

For more information, feel free to Pm or contact me.

Onn
017-6100337

if u have the extra money.. u can go for the life insurance.. as it wil have some cash value and still continue to cover ur life even after ur hse loan finish or transfer name.. like sell off..

more benefits.. but come with a price.. montly payment...

agree with what jusco1 said.Life policy would be a good option if you want to cover all which is life, disability and critical illness. May I know what your DOB ,darlyn . I can quote for you MRTA and MLTA from GE. I will quote for you after know your age. darlyn, I have PM you some details

This post has been edited by leecy: Sep 13 2009, 12:57 AM

Hi:
Here I'll roughly explain about MRTA, MLTA and Life Insurance. Hope this info will help those newbies to get a right idea about what they really need.

MRTA
One lump sum, cheap (If the premium is not integrated into the loan).
Non-transferable. If you refinance your property, you have to buy a new one.
It will be a good deal if you have cash to pay for the MRTA and you don't intend to refinance your property before you settle the loan.
No surrender value.

MLTA
You are paying more premium if compared to MRTA, but after you settled the loan, you can get back your premium paid, together with some interest. Looks like a very nice plan but I don't suggest my client to take this plan. To know reason why, e-mail me at cheahyang_0@hotmail.com

Life Insurance
You pay the premium on annual basis. Premium is higher than MRTA. However, if you integrate your MRTA into the loan, MRTA will cost higher.
Transferable. No need to buy a new MRTA when you refinance your property.

Normally I don't suggest decreasing term to my clients. Even though the loan outstanding is decreasing, but normally your other commitments is keep on increasing throughout your lifetime, especially for those businessmen and investors. Ask yourself, does your assets value and life value is increasing or decreasing over your lifetime? Unless you're telling me that the property you want to buy is the one and only commitment you have in your lifetime, otherwise I don't see a reason why life insurance is not meant for you.

Furthermore, it is advisable to buy life insurance when you're young and healthy. Some more it will cost lesser than you buy it later.

Any questions you can send an e-mail to cheahyang_0@hotmail.com . I'll try my best to solve your problems. Thanks!

Can tell me why MLTA is not good to take? email me at onn88@hotmail.com. Thanks
Actually MLTA is a life insurance itself. People choose to get MLTA because it's give better benefit then MRTA and it's use to replace MRTA. And don't mix together with MLTA and life insurance, because MLTA is cover for property and life insurance is cover for your family. It serve for different purpose.

It's simple. If you afford to pay extra money, why not apply a shorter tenure home loan to save your money. What's the return rate that MLTA can giving you? Effective rate will be most probably 3%p.a to 4%p.a only. Don't you think it's better use your extra money to pay the loan which charge you 4.85%p.a (ING Fixed Rate Home Loan)?
Maybe you can say your current home loan charge you only 3.25%p.a (BLR-2.3%) and you might still have some gain with MLTA. However, don't forget that this loan interest rate is depending on fluctuate BLR, once the BLR rise up, your home loan interest rate will increase as well. I don't think BLR will stay at 5.55% for the following 20-30 years. To view historical BLR, visit http://fortunesense.blogspot.com/2008/12/m...-blr-since.html .
If you say you want to use the extra money for investment which can potentially giving you 6-8% return annually, maybe I will agree with you. But for MLTA, I don't think so.
This is my own opinion, I don't say it's 100% correct.
If you have a second opinion, please share with me. Thanks!

I think you miss out what's the purpose of a MLTA or MRTA
Yes, we can always use the MLTA money to pay off the loan to shorten the tenure, but what if somethings happened to you in the middle time? Who will paying the loan for you? Using our life insurance money?

Of cause MLTA return will not better then the interest you saved when you put the MLTA money back to the loan, simply because MLTA is not for investment purpose, no point to compare the return with the loan. You buy MLTA to get protection and guaranteed a home for your family in case of anythings happened to you in the future. This is the main purpose of a MLTA. You borrow money from the bank, no matter what happen, you or your family will have to pay back money to them or the bank will take away your property. With MLTA, your family no need to worry about the loan installment anymore.

For life insurance, you buy it because you want to give an addition living fund to your family if somethings happened to you. Not use to pay off the loan.

MLTA and life insurance, both serve for different purpose. Although both are similar product.

This post has been edited by onnying88: Sep 13 2009, 07:26 PM

Hello:
I don't think I'd missed out the purpose of MRTA. I just saying I'll not go for MLTA. Life insurance is an alternative to MRTA. My idea is, if you don't have enough cash to pay for MRTA, it's not a bad idea to take life insurance to protection your loan instead of integrate your MRTA into loan. Result can be the same. If anyhing happens to you, insurance company will pay money to your family member to offset the loan. Don't forget, your property will be leaving to your family if anything happens to you. So buying MRTA or life insurance makes no big difference in most situation. As long as what you can leave to your family is a property, not a debt.

You seem to misunderstand what I meant.

Let me make an example.
If I have RM1000, how do I allocate the money? Options are at below:
1) RM750 for loan, RM250 for MLTA.
2) RM850 for loan, RM150 for MRTA / Life Insurance
3) RM750 for loan, RM150 for MRTA / Life Insurance, RM100 for Investment.

I definitely won't go for option 1. MLTA is actually MRTA + Saving. The extra RM100 I use to save here, will always giving me a return rate which is lower than my loan interest rate. Not worth it. Remember before you start a saving (except for emergency fund), please settle your loan first. Otherwise your money accumulated will become less.
To be smarter and safer, I'll go for option 2, which can shorten my loan tenure. Settle this commitment earlier then I can continue with my other plans.
If I'm the one who can take risk, I can also go for option 3. As long as I have the confident to ensure that my investment return rate will be higher than the home loan interest rate. However, this kind of thinking is not recommended by consultants.
If choose option 3, you may be a winner or a loser. But if you choose option 1, surely you'll be a loser. Coz you don't know how to manage your money well.

The point i wanted to say, MLTA is for protection of my property, Life insurance is for protection for my family.It serve for different purpose. If you combine both, where is your family fund after your family take the money to pay off the loan?

Of cause if you look at the point where you can take the money to shorten the loan tenure, why not go for option 4, RM1000 the loan? The money you put for any insurance, also gain lesser then the loan right? Option 4 is 100% the fastest way to settle the loan.

Actually MLTA itself is a life insurance already. Because any life insurance also can be use as MLTA as long it cover the loan amount. If you only have one policy in hand (only one fund for family), be it MLTA or any life insurance, it consider you are in option 2 already.

Hey:
You still don't understand. Either taking MRTA or Life insurance for the loan has nothing to do with family fund. You should long ago prepared proper insurance for family fund. And I'm not telling you to take previous Life Insurance (which is the family fund you meant) for this loan protection.
I mean if you want to buy a protection for your loan, you can choose either MRTA or decreasing term, depends on which can save your cost. I NEVER ask you to use previous life insurance for this loan. No Insurance Agent will make this stupid mistake.
My problem or your problem? You seem can't understand what I said.

Cool down , i thought life insurance will be use as a family fund as normal every one understand. That's why we use the term of MLTA instead of life insurance in mortgage to avoid missunderstand and mix up both. As i mention on above, MLTA is actually a life insurance, any life insurance also can be use as MLTA. So for me, option 1 or option 2 is both same, it's depend of what type of MLTA or life insurance you getting.

For your option
1) RM750 for loan, RM250 for MLTA.
2) RM850 for loan, RM150 for MRTA / Life Insurance
3) RM750 for loan, RM150 for MRTA / Life Insurance, RM100 for Investment.

How about if i can get MLTA for RM150? Will it be better then option 2? With the surrender value from the MLTA

Giving an example,
30years old male, buying a RM150k MLTA for RM155/mth with surrender value of RM63579 guaranteed at 30years.

Can you recommend a life insurance (not MRTA) for RM150k sum assure for same client? What's the extra benefit,price and surrender value? How much you can save if you put the extra money (if have) to the loan.

Thanks for sharing, would like to learn more from others

I thought MLTA is normally refer to life insurance with return (term life + saving plan). Seldom heard someone use MLTA to refer life insurance without return.

For RM150K loan, tenure 30years, assume fixed interest 4.85%p.a (lowest in town), The monthly payment will be RM792.

If I give you a RM150K term life (not decreasing term), will cost about RM72/month. Means money to save here is RM83/mth (RM155-RM72).

Using Financial calculator, the interest rate for the saving is around 4.5%p.a, which is lower than the interest rate of the home loan. Means the RM83/month will lose 0.35%p.a for 30 years.

Let say you add the RM83 into your installment, actually in 24.5 year you can settle the loan already. In another word, you should apply 25 years loan and not a 30 years loan.

Let say you apply MRTA (pay by cash) or life insurance (term life + decreasing term), your cost will be less. Means you can shorten the loan tenure even more.

So do you understand why I don't prefer MLTA (with return)?

You can read back the past discussion we had before your post here.
My MLTA, is without return and I pay down based on what I owe the bank.
In long run, I do not need to pay MLTA when my loan amount owed is below a certain amount as my other emergency funds or insurance can cover it.

Ok, from your above calculation. Using the RM155 MLTA, i will get return of RM49776 at 25year from the MLTA.
At 25years, my loan outstanding will be RM41828. (using fixed rate 4.85%)
So i can take the money from MLTA and pay the loan balance. RM49776- RM41828 = RM7948 extra i can get.

So in order to match with your 24.5 years. I paid extra 6month x (RM792+RM83) = RM5250

Which mean i total earn RM7948- RM5250 = RM2698 with condition i still get the same protection with RM150k and paying the same installment amount. Although i need to pay another 6month, but i pay 6 month extra to gain RM2698.

And above calculation is base on 4.85% fixed rate. Which is a lot higher then normal mortgage loan rate BLR-X%. But i still can earn a bit.

As i keep on mention, MLTA is actually a life insurance, as MLTA = Mortgage Level Term Assurance. So any life insurance that can offer level protection, we can use it to replace the MLTA. It just depend which product you think is most suitable to replace.

To : b00n
Sorry that I didn't read the previous posts. In fact I didn't mean to post so much things at here also. Now I just realise I shouldn't say not to recommend MLTA, but I should have say not to take any MLTA that has a saving component. Does it correct my sentence? Or how should I say to make it clear?

To : Onnying88
From the example you given, I feel something not quite right. From your previous post you said your MLTA has a return of RM63579 after 30 years (4.5%p.a compound interest rate from calculation). Then your last post says RM49776 after 25 years (5%p.a compound interest from calculation). Why compound interest rate for 30years is less than 25years? Do you mind refer back your quotation? RM49776 has a compound interest of 5%p.a (which is higher than 4.85%p.a for the loan), of course you can see some profit here.

Second, is this a participating policy or non-participating policy? If this is a participating policy, remember that the return is non-guaranteed. It could be more or be less as well. Hope that the value you provided above is not from the scenario with the higher return (which is not likely to be happened in most of the time).

Third, You may be right. Current loan with BLR-X% is much cheaper than fixed rate home loan. The reason is simple, you take the risk of BLR, therefore bank offer you a cheaper rate at the moment. However, don't forget BLR will fluctuate. If BLR going up you're going to pay more money for the interest and your loan tenure will be extended. If you prefer to take the loan with BLR-X% and you believe BLR will stay below 7% for the rest of your loan tenure, you can just go ahead.