MRTA (Mortgage Reducing Term Assurance) is cheaper and tied to one loan with coverage that reduces over time, while MLTA (Mortgage Level Term Assurance) costs more but keeps level coverage, is portable between loans, and can pay a cash surplus to your family. Choose MRTA if you want the lowest cost and will keep the same property; choose MLTA if you want flexibility and a payout beyond the loan balance.
What Is MRTA?
MRTA is a single-premium (often financed into the loan) life policy that pays off your outstanding home loan if you die or become totally permanently disabled. Its coverage reduces each year in line with your shrinking loan balance, and it is tied to that specific loan and property. Cheapest option; no cash value.
What Is MLTA?
MLTA is a level-term policy — coverage stays constant for the term, so if you die early the payout clears the loan and the surplus goes to your beneficiaries. It is portable (you keep it if you refinance or sell and rebuy) and some plans build modest cash value. Costs more, usually paid annually.
MRTA vs MLTA — Key Differences
- Cost: MRTA cheaper (single premium); MLTA higher (ongoing premium)
- Coverage: MRTA reduces over time; MLTA stays level
- Portability: MRTA tied to one loan; MLTA follows you
- Payout to family: MRTA clears the loan only; MLTA can leave a cash surplus
- Best for: MRTA = lowest cost, long-term hold; MLTA = flexibility + family protection
Which Should You Choose?
- Choose MRTA if: you want the lowest cost, plan to keep the property long-term, and just need the loan cleared
- Choose MLTA if: you may refinance or upgrade, want level coverage, or want your family to receive a payout beyond the loan
Neither is compulsory by law, but banks often require some form of mortgage protection. Factor the premium into your budget — estimate your monthly instalment first with the home loan calculator and check affordability with the loan eligibility & DSR calculator.
Ready to Buy?
Once your financing is sorted, browse new property launches or read the first-time buyer guide.
Frequently Asked Questions
Is MRTA or MLTA better?
MRTA is better if you want the lowest cost and will hold the same property long-term — it clears your loan on death or total permanent disability, with coverage that reduces as the loan shrinks. MLTA is better if you want level coverage, portability between loans, and a cash surplus paid to your family beyond the loan balance, in exchange for a higher premium.
Is MRTA compulsory in Malaysia?
Mortgage insurance is not required by law, but many banks require some form of mortgage protection (MRTA or MLTA) as a loan condition. You can usually choose which, and MRTA can be financed into the loan while MLTA is typically paid annually.
Can I get a refund on MRTA if I settle my loan early?
MRTA may offer a partial refund on early settlement, calculated on the unused coverage term, but the amount is usually small because coverage reduces over time. MLTA, being a level policy that may build cash value, behaves differently. Confirm the surrender terms with your insurer.