22/01/2024
“Who would buy MLTA if it’s more expensive?”
By default, your mortgage loan will typically be bundle with a MRTA, a life insurance. For the general public, this will be the mortgage insurance they will opt for as it is the “default” option.
When the banker approach us for the mortgage loan, they will together sign us up for the MRTA. The payment for the MRTA will also be made together with your mortgage repayment. So in most cases, if we didn’t pay too much attention, we might not even realise our mortgage loan has an insurance.
I think MRTA has its own benefit as it’s drastically cheaper (in terms of premium), and often banker offers better interest rate when you bundle your mortgage loan with their bank’s MRTA. And it’s hassle free. All can be done in one go while signing for the mortgage loan. When’s there the element of convenience, it’s hard to downplay the practicality of MRTA.
Here comes another option, MLTA. Without a strong insurance awareness, this option is something many are not aware of because this option doesn’t usually fit into the process of buying a property. Unlike MRTA, which you will do alongside your mortgage loan, MLTA will require us to approach insurance agent (someone who also typically won’t be involved in your property purchases) to apply.
But by understanding both tools, they can definitely complement each other really well. As an investor, ROI is the ultimate metrics to measure our investment success.
Hence, while we are striving for the maximum return, not to forget the risk management aspect of the investment game.
