Buying a home with a partner or family member means sharing ownership and the home loan responsibility. But what happens if one co-owner dies before the loan is fully paid off? Understanding how banks, ownership structures, and insurance work is important. This knowledge helps protect your loved ones and your property.
1) Ownership Structure Determines What Happens Next
A. Joint Tenancy
- Most couples in Singapore hold property as joint tenants.
- In this setup, the Right of Survivorship applies. This means the surviving owner automatically gets the deceased’s share of the property.
- In this situation, there would be a transfer of ownership. During the restructuring of ownership and home loan, the home loan obligation remains. The surviving owner becomes fully responsible for continuing the mortgage repayments.
Example:
If you and your spouse own a condominium together, and one of you dies, the other becomes the sole owner. The surviving spouse must keep paying the housing loan.
B. Tenancy-in-Common
Under tenancy-in-common, each owner holds a distinct share of the property (e.g. 70%-30%).
If one co-owner passes away, their share does not transfer automatically to the surviving co-owner. Instead, it becomes part of the deceased’s estate. They then distribute it according to their will or the Intestate Succession Act.
In this case:
- The deceased’s estate or heirs can take over the share of the property,
- They may choose to continue loan repayments, or
- Decide with the bank and surviving co-owner whether to sell or restructure the property ownership and loan.
2) The Mortgage Loan Doesn’t Disappear Upon Death
When one co-borrower passes away, the loan remains legally enforceable. The bank expects the surviving borrower(s) or the deceased’s estate to continue repaying the outstanding balance.
If someone leaves the loan unpaid, the bank can recover the debt through repossession or the sale of the property. This is why proper mortgage protection is essential, especially for dual-income families or older borrowers.
3) How Mortgage Insurance Protects Homeowners
A. HDB Home Protection Scheme (HPS)
If you bought an HDB flat and used CPF savings to pay for it, you likely have insurance under the Home Protection Scheme (HPS).
When an insured owner passes away or becomes permanently disabled:
- HPS will pay off the outstanding housing loan, fully or partially (depending on the insured share).
- The surviving owner(s) inherit a fully or partially paid-up flat.
Click here to view HPS Official Guidebook (PDF)
B. Private Mortgage Insurance (MRTA/MDTI)
For private properties financed through banks, HPS doesn’t apply.
Instead, homeowners can take up a Mortgage Reducing Term Assurance (MRTA) or Level Term Insurance (LTI).
These plans ensure that, in the event of death or total permanent disability, the insurance payout either clears the remaining loan or is retained as a reserve to continue servicing the loan, providing surviving family members with peace of mind.
4) If There’s No Insurance Coverage
If no mortgage insurance is in place:
- The surviving co-owner must continue servicing the home loan.
- If affordability becomes an issue, possible options include:
- Refinancing the loan into one borrower’s name (if income qualifies);
- Selling the property to redeem the loan;
- Discussing restructuring options directly with the Mortgage Specialist.
5) Summary Table
| Scenario | Ownership Type | What Happens to Ownership | Who Continues Repayment | Role of Insurance |
| Joint Tenancy | Automatic transfer to surviving owner | Surviving owner | Surviving owner | HPS or MRTA may repay loan |
| Tenancy-in-Common | Deceased’s share goes to estate/heirs | Surviving owner & estate | Survivor owner | HPS or MRTA may repay the loan |
| No Insurance | Insurance covers the deceased’s portion | Surviving owner must continue | Full repayment responsibility | Not applicable |
| With HPS/MRTA | Either | Surviving owner & estate | Outstanding loan reduced/cleared | Financial burden eased |
Professional Insight
Having the right ownership structure and insurance coverage can make a world of difference. Many Singapore homeowners overlook this, assuming joint ownership alone offers a sufficient safety net.
In reality, only proper mortgage insurance ensures the home remains secure for your loved ones.
Not sure about your current coverage or considering refinancing? Speak with IQrate’s mortgage specialists for a free, no-obligation consultation. We’ll review your loan structure, insurance, and refinancing options to ensure your home loan strategy is future-ready.