What is Mortgage Insurance?
It is an insurance plan the homeowner buys when they buy a home with a loan.
In the event that the owner passes away, or suffers from a terminal illness or permanent disability, resulting in his/her inability to pay the mortgage, the insurance will pay the remaining balance of the mortgage.
What is the CPF Equivalent?
It is called the CPF Home Protection Scheme.
You must buy this insurance if you are using your CPF to pay for your HDB mortgage.
It is automatically deducted from your CPF OA every year when it is up for renewal.
For more information about this scheme, click HERE.
Why does it Suck?
The premium you pay is fixed for the whole period, eg if the premium $300 per year when your outstanding mortgage is $400,000; the premium will still be $300 after 20 years even though the outstanding mortgage balance would have dropped to $50,000.
If the owner passes...