MRTA, MLTA, MRTT or MLTT — which to choose?
Quick answer: All four protect your home loan if the borrower dies or is permanently disabled. MRTA/MRTT: cover reduces with the loan balance, cheaper, usually a single premium that can be financed into the loan. MLTA/MLTT: level cover for the whole term, more expensive, portable to another home. The T (Takaful) versions are Shariah-compliant — the usual choice with Islamic home financing.
| MRTA / MRTT | MLTA / MLTT | |
|---|---|---|
| Cover | Reduces with the loan balance | Level for the whole term |
| Cost | Lower | Higher |
| Payment | Usually single premium, can be financed | Usually monthly / yearly |
| If you move / refinance | Usually ends | Can be transferred (per policy) |
| Shariah version | MRTT | MLTT |
Which suits you?
- Tight budget, Islamic financing: MRTT — cheapest and Shariah-compliant.
- May refinance or sell within a few years: MLTA/MLTT is more flexible.
- Already have enough life cover/takaful: ask the bank whether separate cover is required.
Compare product sheets, cover term and sum covered. Match the cover and term to the loan, and name a nominee/trustee.
See also: Islamic home financing.
Frequently asked questions
What's the difference between MRTA and MLTA?
MRTA cover reduces with the loan balance and is cheaper; MLTA gives level cover for the whole term, costs more and is portable.
What is MRTT?
Mortgage Reducing Term Takaful — the Shariah-compliant takaful version of MRTA. Cover reduces with the financing balance.
Is MRTA compulsory?
Not by law, but most banks require some form of loan protection. You can choose the type and compare prices.
Can MRTA be included in the home loan?
Yes, a single-premium MRTA/MRTT can usually be financed with the loan — it adds slightly to the loan and instalment.