Hi guys, i am looking for advice whether to buy MLTA or MRTA.

If buy MRTA, the loan interest rate will be lower.

What you guys would choose?

MLTA, no need investment element

Both also got pros n cons.

U Joint loan and joint owner or how 1st?

I am individual buyer. Not joint.

Negotiate the requirement away and plan under your own term insurance. Going through a 3rd party, means another layer of fee.

As long interest is low, premium is affordable and is able to cover the loan, is good enough .... that is the purpose of buying the property.

Dont try to link other things into the purchase as it is not relevant.

This post has been edited by mini orchard: Jan 28 2022, 05:18 PM

Just get MRTA, you are insuring the value of your property, not yourself. MLTA you can buy anytime.

ask them if you can separately purchase a standalone life insurance and charge it to the bank for the tenure of the loan. although the chances are very slim, bank wants to make money as much as possible.

you might be able to get the requirement for insurance waived if another bank offers. banks will match each others offers. that's what I did.

If you want MLTA, try to nego with bank to take minimum MRTA/MLTA so that the interest is on the lower side. Then buy MLTA from outside.

If you take MRTA/MLTA from bank, the premium will be added on top of the loan and will be charged with interest unless you plan to pay the lumpsum amount.

Just my 2 cents.

MRTA is to insured the borrower against any eventuality of a happening and he cant cont to pay the instalment.

Some banks give options to borrower whether to purchase or otherwise as if anything happen and the borrower cannot pay, they will proceed to auction the property....just more procedure to recover the loan.

I went for MLTA. Just needed to top up about RM360 on top of my installment per month for 500k coverage, payment for 20 years, coverage for 40 years. At the end of the maturity, can withdraw out the cash amount. Also, can be considered as Life insurance for income tax deduction purpose.
For MRTA, I needed to top up RM70+ on top of my installment, if factor in the interest charged on top of the MRTA premium. But it's reducing coverage.
RM360 - RM70 = RM290 top up.
MLTA is transferrable, not attached to a specific property. If I sell a property, and buy another one, I don't need to get a new policy.
Either MRTA and MLTA also my banker offered me lowest interest rate.

This post has been edited by Michaelbyz23: Jan 28 2022, 09:25 PM

Hi all,
Wonder why do we consider MLTA when we can buy LIFE INSURANCE? Isnt the latter better than MLTA? Premium for latter also lesser.

Go for mlta, i regret taking mrta because cannot transfer when selling the unit.

Cross sell for the bank. Fee income. Hence, try to negotiate away. If can’t? Try to negotiate for the min requirement to get the best rate.

aiya want save money . follow me.. buy mrta cash upfront kaodim. save more than 70%. I did that. So ez.

But truth though. If you park it in your loan . you pay very expensive.

My loan is around 680k and i pay RM11k for my MRTA for 35 years. if include in loan almost 30-35k

By the same reason, you should buy the house using cash, because the interest rate is the same for your outstanding loan and the Mrta parked into the loan

Yeah true also. But now cost of debt is cheap. That why sometimes why not pay cheaper debt. If your investment have return more than your loan interest rate. Invest in it.

You can surrender the mrta to the provider and get whatever residue cash value left. It’s not zero.

Is only good 'value' if the next property loan is lower, otherwise need to top up premium also to cover the additional risk. It wont be cheap because of age factor.

This post has been edited by mini orchard: Jan 30 2022, 05:59 AM

11k for 680k property over 35 years? That's very cheap.
My previous MRTA cost me 17k for 480k, 35 years

How come you guys can get so cheap premium?

The quotation i got 30k mrta for 35 years

Insurance premiums have increased over the years. Those purchased 10 years ago is obviously cheaper unless date is stated for comparison.

Insurance business is competitve and premiums wont differ much from each co unless there is loading because the insured is higher risk borrower (health issues)

Reasons for low premium ....

1. Coverage not for the entire loan duration.

2. Amount insured not equal to loan ...... meaning ... the coverage will reduces faster than the outstanding loan.

Eg .. after 3 years repayment, principal reduces 10k BUT mrta coverage reduces 30k.....meaning is under insured oredi.

Banks are more concern of the initial years coverage when the outstanding loan is high and to ensure premium is 'affordable' to borrowers.....cover something better than nothing.

As the repayment progresses over the years, the 'cash value' of the property increases and if mrta cannot cover the outstanding loan and next of kins also unable to settle it, the banks can easily recover the balance from the auction proceeds.

Alternatively, the outstanding amount where mrta is not enough to cover may be 'affordable' to next of kin to settle, discharge the loan and take legal ownership from the bank.

Many borrowers wont know when such incident dont happen and mrta is all about eventuality.

Read the coverage schedule.

This post has been edited by mini orchard: Jan 30 2022, 09:00 AM

Thanks for your explanation. So it is better to take MLTA?

It doesnt matter mrta or mlta, but the insured value which is what insurance is all about.

Premium is different for both and it depends on one budget and what the insured wants at the end of the coverage or after the property is sold / loan completed.

MLTA follows the insured instead of the property and unlike MRTA, MLTA will have cash value over time.

“Your Family Will Have To Pay Your House Debt If You Die” Netizens Warned To Be Aware Of Their House Insurance Policies

Even if they get the insurance, they would still have to pay the remainder of the loan.

Hakim Hassan
BY HAKIM HASSAN
FEBRUARY 7, 2022

Buying a house can be a daunting task for many, with the loan for these assets spanning up to multiple decades and also the costs that you have to put up with within the space of time.

One user shared on a Facebook group about the Mortgage Reducing Term Takaful (MRTT) or Mortgage Reducing Term Assurance (MRTA), which are insurance products that buyers have to take when they purchase a house.

It was originally written by user Azri Johan before it was reshared again recently.

The post starts off with the user saying that buyers should be aware of the important bits of information regarding their purchase including loan tenure and MRTT/MRTA coverage.

Many think that when buying a house, the house is 100% theirs. I was like that before. But in fact, if we buy a house on a loan with a bank, we have to check back our loan agreement. How long is a loan with a bank? How long is MRTT/MRTA coverage? This thing is the period the bank covers the loan in case of the death of a borrower during the period of still owing the bank. Please avoid being like the case below. Loan with a bank for 35 years, but MRTT coverage is up to 10 years 😱How long is a loan with a bank?
The post went on to describe what happens if a person dies within that 10-year period.

That is, if we die within the 10-year coverage period, the heirs can make a claim at the bank. But even this MRTT claim can’t cover the remaining loan, the heirs have to top up and use their own money 😥 Worst case scenario, if you die in the 11th year to the 35th year, the balance of your loan must be settled by your family members.
If the person is married, the post mentioned, then the burden will then fall on their surviving spouse or family members.

It is sad to lose the head of the family, even sadder when you have to bear a debt of hundreds of thousands of ringgit.
What happens when you can’t settle the debt
In the event that the family members can’t manage to pay back the loan, the house would have to be auctioned.

As long as we do not settle the debt with the bank, the bank has the right to our house. After all, banks must not lose money, because they are not charities. Right?Moral of the story. How much the insurance covers the house we bought.

tried different bank ? maybe they not satisfy with ur risk profile

I go for MLTA because it can be transfer + cash value

Unlikely the transfer can match new loan UNLESS downgrade purchase.

Honestly instead of MLTA, i would rather just pay for a normal PA policy and subscribe at the value of the total loan.

1. It will cost you much cheaper
2. You can compare with more insurance providers

MLTA wont affect your loan interest. Any agent who said this, is a con. Trust me, i've been conned before.

One of the banker told me MLTA cannot be transfer. Is it true?


Haha, true. Thanks for the advice.

Im same like u TS

If take MRTA, get lesser interest rate, but I wanted to take MLTA

What i did was take minimum MRTA (5 years) to get the lower loan interest rate

Then when my loan going into 3rd year, I went to buy MLTA

MLTA is just like normal life insurance. You don't have to wait for your house purchase to get a MLTA. You can buy life insurance anytime.

Bank can allow us to buy normal PA policy?

Bank has nothing to do with our insurance. Its optional. Those who made it mandatory most likely its part of their way of making more money out of you.

When I bought my 1st apartment, I assigned my ING life policy to mbb to replace mrta.

After I sold the unit, I cancel the assignment.

The reason why some banks insist in mrta/mlta is to make loan recovery easier instead of through auction

This post has been edited by mini orchard: Feb 10 2022, 12:19 PM

what if same value? but i bought the property for invest purpose

MRTA / MLTA is not about value but to cover outstanding loan if something happen to the borrower and the loan cannot be settled.

meaning if you have let say 1m life insurance, and you already attach it to your current property that cover your 1m loan..any new property purchase you cant share the same insurance right?

Why want to share if cannot cover the combined total loan. .... not logic .... similar to under insured.

If nothing happen, then ok .... BUT IF ?

Better to buy mrta .

This post has been edited by mini orchard: Feb 10 2022, 08:34 PM

If life can cover, why want to attach property leh?

Just buy life+PA insurance without attaching to any property can?

Not really right to say attach to any property.
Basically having coverage for any loan/obligation you have in case of your death.

I advise life insurance. And, if you dont line MRTA. just get those basic life insurance with any other companies. End result is same. You just want your family to not be burdened with bank loan.

Was wondering why loan officer (not from bank but those outside company) say if go thru them must buy MLTA as mandatory.

Is for their 'effort' to secure a loan for the borrower as in such cases, more likely the borrower only has a 50/50 chance of securing a loan.

Some banks required assignment of a life policy to the specific loan and only upon full settlenent can the borrower allowed to cancel the assignment.

If something happen, claim money will go to the bank first to settle the outstanding loan and the balance, if any refund to the borrower's estate.

This post has been edited by mini orchard: Feb 11 2022, 06:21 AM

hi , may i know issit recommended to exclude the mrta from the loan ? I heard if we do that after first year we can cancel the mrta . this will allow us to get the better interest rate and reduce the compulsory mrta cost by bank ?
Is it true ?

Why do you want to surrender the Mrta ? Isnt life insurance for your own good as well?

You can cancel but bank can also revised to the original interest rate.

No need consent from bank to cancel since they are the beneficiary ?

My loan is around 690K almost the same price as yours , but i was quoted 64K for the MRTA .
Can i know which bank you took the MRTA from ?

Check your premium here ......

https://www.etiqa.com.my/getonline/calculator-mrta-ltfi

64k for MRTA is very expensive. You may proceed with MLTA or PA outside rather than those quoted by the bank.

My understanding PA will only cover for accident cases, it will not cover illness . So its not sufficient actually.
Do correct me if i am wrong ?

Hello there. It might come as a surprise to you that bundling or requiring customer to take up MLTA or MRTA to be eligible for credit facility is a prohibited business practice for the FSP (financial service provider - banks) as stipulated by Bank Negara, see here:

https://www.bnm.gov.my/documents/20124/9380...t=1592246404850

So, if the FSP offers you lower interest rate if you have some kind of insurance, you can opt out from buying an MRTA / MLTA and furnish them a copy of your life insurance policy (hopefully the sum insured is higher than the loan amount you taken). I have personally done this to UOB / Prudential MRTA before and got back the premium paid pro-rated.

In short, MLTA is better than MRTA. MRTA has no residual value and it is cheaper, but it insures the bank against your demise. MLTA is like a life insurance, your family will get the money in the event of your demise.

To some banks, whether you buy mrta or mrta or have life insurance is not an issue. My loan doesnt require borrower to buy but I bought it on my own initiative

Having an insurance is for easy 'settlement' in the event something happen to the borrower.

If at all the insurance claims cannot cover the loan due to 'short' purchase, the bank will proceed to auction the property if borrower or beneficiary cannot settle the balance, albeit a longer process.

This post has been edited by mini orchard: Mar 11 2022, 05:45 PM

Nowadays bank bundle the insurance premium to gives better rate. This is wat I obtained from the FSP.

Yea the bundled MRTA is definitely better for many people who don't want to treat an insurance as an investment. Better cashflow and more cash on hand for better plans or projects

Hi Sifus,

Existing MLTA can add on new property?

Thanks

Agree

What do you mean by add on? MLTA amount insured is fixed

It's okay, got hold of my agent. Can add on to reflect for additional loan amount, monthly payment increase.

Oh~ problem solved then good, cause MLTA is like life insurance, you can just top up for additional insured total amount

MRTA

Guys or girls, is there any recommended MLTA insurance company? Or, mostly there are the same?

I know AIA provides this, not sure about others. My friend worked in AIA and i am asking him to quote me one.

All insurance co sell mlta. You can also buy from your current life / medical co.

Mlta is just another life product.

All the same.

Just ensure that it's recognized insurer for your home loan’s bank.

Reading this thread got me curious about if I had MRTA or MLTA for my condo. Manage to find out that my unit had MLTA under Manulife, but it was only for 7 years. Premium was 6k for a 381k loan. This MLTA was packaged with the loan.

So question is, I read that MLTA after the term is over, premium is returned. So where did the cash go?

Premium 6k for 7 years is probably for MRTA.

MLTA you have to make recurring payments and will cost more than that.

Also who told you premium is returned for MLTA? You are referring to cash value?

Does purchase of MRTA by individual need to pay service tax?

My CIMB Bank force me buy MRTA 14k for cover 250k loan only for 21 years. after i take MRTA the interest rate offer me is 3.80%, but UOB offer 7k cover loan 210k for 13 years, and interest rate is 3.65%.

WHy CIMB Interest so high and MRTA so expensive?

If cimb offer lower than uob, then you will ask why uob so expensive. Is just like merry go around.

Possible cimb going for higher borrowing customers since paper work all the same nia.

As for mrta, one is 21 years and another is 13 years coverage, don't you see the answers is obvious ?

If there are no product differentiation, then no need to spend money on A&P and Mortgage Officer pay liao. Just close eye to borrower from any bank.

Haizzzzzz

This post has been edited by mini orchard: Jul 14 2025, 07:51 AM