When purchasing a Housing and Development Board (HDB) flat in Singapore, prospective homeowners often overlook the significance of the Home Protection Scheme (HPS). This document aims to shed light on why HPS is essential, who qualifies for it, and the benefits of having this insurance coverage. Understanding these aspects can help you make informed decisions during your home-buying journey.
What is HPS?
The Home Protection Scheme (HPS) is a mortgage-reducing insurance scheme designed to protect HDB homeowners and their families. It ensures that in the event of the homeowner’s death or total permanent disability, the outstanding mortgage loan will be paid off, allowing the family to retain ownership of the home without the burden of debt.
Why is HPS Important?
- Financial Security: HPS provides peace of mind by safeguarding your family’s financial future. In the unfortunate event of your passing or disability, your loved ones will not have to worry about losing their home due to unpaid mortgage loans.
- Affordability: The premiums for HPS are generally affordable and can be paid through your Central Provident Fund (CPF) savings. This makes it a cost-effective way to secure your family’s home.
- Mandatory Requirement: For many HDB buyers, taking up HPS is a requirement when applying for a housing loan. This means that having HPS is not just beneficial but often necessary to secure financing for your new home.
Who is Eligible for HPS?
Adapted from CPF website: https://www.cpf.gov.sg/member/home-ownership/protecting-against-losing-your-home
- You own an HDB flat: HPS does not cover private residential properties, such as executive condominiums (ECs) or privatised Housing and Urban Development Company (HUDC) flats.
- You’re using CPF savings or cash to pay a housing loan: If you’re using CPF savings to pay your monthly housing instalments, HPS is required. If you’re using cash, we strongly encourage you to apply.
- You’re in good health: Your eligibility for an HPS cover is subject to approval and you being in good health. If you’re not eligible for HPS cover, you can still use your CPF savings to pay your monthly housing instalments.
Did you know?
- HPS is not the same as fire insurance or life insurance.
- You can be exempted from HPS if you already have equivalent private insurance coverage — but you’ll need to apply for exemption through CPF.
Why You Should Have HPS
- Protection for Your Family: HPS ensures that your family can continue living in their home without the financial strain of mortgage repayments in case of unforeseen circumstances.
- Peace of Mind: Knowing that your loved ones are protected can alleviate stress and allow you to focus on other aspects of homeownership.
- Flexibility: HPS offers various coverage options, allowing you to choose a plan that best fits your needs and financial situation.
- Support from CPF: Since premiums can be deducted from your CPF account, it makes the scheme more accessible and manageable for homeowners.
Wrapping up!
When you’re buying a HDB flat, don’t overlook the Home Protection Scheme. It’s more than just an insurance requirement — it’s a smart safeguard for your home and your family’s future.
Need help understanding how HPS fits into your HDB purchase journey? Feel free to reach out — I’m here to guide you through it!
Here to help you navigate your HDB journey.
Love & keys,
Rachel 🔑
