It’s a question that few homeowners want to think about, but one that’s extremely important.

When you co-own a property with your spouse, sibling, or parent, what actually happens if one co-owner passes away?

 

In Singapore, the outcome depends on several key factors:

• The type of home ownership (Joint Tenancy or Tenancy-in-Common)
  
  
• Whether there is mortgage insurance coverage (like HPS or MRTA)
  
  
• How the home loan is structured
  
  
• And the estate and inheritance laws that come into play
  
  

Understanding these details early can help you and your family avoid financial hardship or legal disputes later.

 

At Fairloan Mortgage Advisory, we’ve seen how proper planning, including the right loan structure and insurance protection, can make a world of difference when unexpected events happen.

 

1. Joint Tenancy vs Tenancy-in-Common: Ownership Matters Most

In Singapore, most co-owned properties are held under one of two legal structures: Joint Tenancy or Tenancy-in-Common.

This choice determines what happens to the property if one owner dies.

 

Under a Joint Tenancy, ownership is shared equally and includes a right of survivorship. That means when one co-owner passes away, their share automatically transfers to the surviving co-owner(s),  without going through probate.

For example, if a married couple holds a flat under Joint Tenancy, and one spouse dies, the surviving spouse becomes the sole legal owner immediately.

 

In contrast, under Tenancy-in-Common, each owner holds a defined share, it could be 50-50, 70-30, or any proportion agreed upon.

 

When one owner passes on, their share does not automatically go to the surviving co-owner. Instead, it becomes part of the deceased’s estate and will be distributed according to their will or under the Intestate Succession Act if no will exists.

 

So, in short:

• Joint Tenancy → survivor automatically inherits the share.
  
  
• Tenancy-in-Common → deceased’s share goes to their estate or beneficiaries.
  
  

This distinction is the foundation for everything that follows — including how the outstanding home loan is handled.

 

2. What Happens to the Outstanding Home Loan?

If a co-owner passes away while a home loan is still active, the loan does not disappear automatically. The remaining debt must still be serviced.
The outcome depends on the loan structure and insurance coverage.

 

Scenario 1: HDB Loan under Joint Tenancy

If you bought your HDB flat using an HDB concessionary loan and both co-owners were insured under the Home Protection Scheme (HPS), the scheme typically pays off the insured share of the loan upon death, total permanent disability, or terminal illness.

 

For instance, if both spouses are insured under HPS at 50% each, and one passes away, HDB will use the HPS payout to clear that half of the mortgage. The surviving spouse would then continue paying only the remaining half of the loan.

 

If the deceased was insured for 100% of the loan (possible if one spouse was the main earner), the entire outstanding balance may be cleared, leaving the survivor mortgage-free.

 

Scenario 2: Bank Loan for HDB or Private Property

For bank loans, HPS does not apply. Instead, homeowners can choose Mortgage Reducing Term Assurance (MRTA) or Mortgage Reducing Term Insurance (MRI) from private insurers.

These plans work similarly; the insurer pays off the insured portion of the loan if the borrower dies during the policy term.

 

However, if there is no insurance coverage, the surviving co-owner becomes responsible for servicing the entire outstanding loan.

This can be financially challenging, especially if the surviving party’s income alone is insufficient to meet the monthly repayments. In such cases, the bank may allow refinancing, restructuring, or a temporary deferment, but it’s not automatic and interest continues to accrue.

 

3. How CPF and Insurance Come Into Play

For HDB loans, most co-owners pay monthly instalments through CPF Ordinary Account (OA) deductions.

When one owner passes away, the surviving owner may still continue to service the loan using their CPF, but the deceased’s CPF balance may also be tapped, depending on how CPF and HPS are arranged.

 

Under the Home Protection Scheme, CPF Board automatically uses the insurance proceeds to reduce or pay off the housing loan. This helps prevent families from being forced to sell their homes after losing a breadwinner.

 

If the property was financed through a bank loan, however, there’s no automatic CPF-linked protection. The surviving borrower must rely on any private mortgage insurance they have, or else pay the remaining loan using CPF (if funds are available) or cash.

 

This is why Fairloan always recommends reviewing your mortgage insurance coverage， especially when the home loan is a joint one. Ensuring that each owner is adequately insured can make the difference between keeping the home and losing it.

 

4. If There Is No Mortgage Insurance

If neither HPS nor private MRTA/MRI was in place, the surviving co-owner remains legally liable for the entire loan.
The bank or HDB will not cancel the mortgage simply because one borrower has died.

 

If the surviving borrower cannot afford the repayments, several outcomes are possible:

• The loan may be restructured with a longer tenure or refinanced with another bank.
  
  
• The family may sell the property to settle the loan balance.
  
  
• In worst cases, if the mortgage falls into arrears, the lender may repossess the property.
  
  

For HDB flats, HDB typically provides assistance such as temporary deferment, loan restructuring, or partial grants, especially if dependents are involved. But for private properties, banks are stricter and repayment obligations remain contractual.

 

This is another reason why joint ownership without proper insurance can be risky, even if both owners are financially healthy at the time of purchase.

 

5. Estate and Inheritance Implications

If the property is held under Tenancy-in-Common, the deceased’s share will form part of their estate. The executor (or administrator) must then decide whether to sell the property and distribute proceeds, or transfer the deceased’s share to a beneficiary, subject to loan and lender approval.

 

If the surviving co-owner wishes to keep the home, they may have to buy out the deceased’s share from the estate, often requiring a refinance or new mortgage. The bank will need to re-assess the borrower’s financial capacity before approving such a transaction.

 

This process can take months, and in the absence of a will, the Intestate Succession Act determines who inherits, typically spouse, children, or parents, depending on family structure.

 

For Joint Tenancy, this complexity is avoided because ownership transfers automatically to the survivor. However, as mentioned earlier, survivorship also means the surviving co-owner inherits the full loan obligation if the deceased’s insurance coverage was incomplete.

 

6. HDB Flats vs Private Property: Key Differences

When it comes to property and death, the rules differ slightly depending on whether the property is HDB or private.

 

HDB flats fall under the purview of the Housing & Development Board, which enforces specific ownership and occupancy rules.

 

Joint HDB flat owners under Joint Tenancy generally see an automatic transfer of ownership to the survivor upon death, processed directly by HDB once the death certificate is produced. If there is an outstanding HDB loan, the surviving owner continues to repay or relies on HPS if applicable.

 

For private properties, ownership transfer and mortgage obligations are governed by private contracts, bank terms, and the Land Titles Act. The executor of the estate must handle legal conveyancing to remove the deceased’s name and register the surviving co-owner (if applicable) or new owner (beneficiary).

 

If the property is still under loan, the bank’s consent is needed for any transfer, and they may require re-assessment of creditworthiness before approving.

 

7. The Role of Mortgage Insurance — Why It’s Essential

Mortgage insurance is often overlooked, but it’s one of the most important safeguards for homeowners.

 

The Home Protection Scheme (HPS), administered by CPF Board, is compulsory for HDB buyers using CPF to service their loan. It automatically covers the insured person’s share of the mortgage up to age 65 or until the loan is fully repaid.

 

Private homeowners using bank loans can take up similar protection through Mortgage Reducing Term Assurance (MRTA) or Mortgage Reducing Term Insurance (MRI) from insurers such as AIA, Prudential, Great Eastern, or NTUC Income. These plans ensure that the family home remains secure even if one co-owner passes away unexpectedly.

 

Without insurance, the surviving owner may face both financial and emotional strain, potentially forcing the sale of the property to settle the loan. With insurance, the payout clears part or all of the mortgage, allowing the family to keep their home and grieve without added financial stress.

 

At Fairloan, we often advise homeowners to align their mortgage insurance coverage with their ownership share and to review it periodically as their loan balance decreases. It’s a small cost that can safeguard the biggest asset your family owns.

 

8. Practical Example

Consider a couple, James and Mei, who jointly own an HDB flat worth $600,000. They took an HDB loan of $450,000, with both insured under HPS for 50% each.

 

If James passes away, HPS will pay off his insured 50% share, about $225,000, leaving Mei to continue servicing only her half of the loan. She remains the sole legal owner under Joint Tenancy.

 

Now imagine if the same couple bought a private condo with a bank loan instead, and only James had private MRTA coverage for 50%. Upon his death, the insurer would pay off half of the outstanding mortgage, while Mei would take over full ownership and continue servicing the remaining 50%.

If there were no insurance, she would have to refinance the full amount in her own name, possibly with a shorter tenure or higher rate, depending on her income.

 

This example illustrates why ownership structure and insurance coverage must always be planned together. A mismatch can leave the survivor either overburdened or locked in complex estate processes.

 

9. Key Takeaways

If a co-owner passes away in Singapore, the impact on your home loan depends on a few decisive factors:

1. Ownership type: Joint Tenancy transfers ownership automatically, while Tenancy-in-Common passes the share into the deceased’s estate.
   
   
2. Loan type and insurance: HDB loans are usually protected by HPS; bank loans require private insurance.
   
   
3. Age and affordability: The surviving owner remains responsible for repayments unless insurance covers the full share.
   
   
4. Legal processes: Tenancy-in-Common cases may require probate and bank consent before ownership or loan can be restructured.
   
   

Understanding these nuances before they become reality can protect your loved ones from unnecessary legal and financial difficulties.

 

10. Fairloan’s Perspective: Prepare Early, Not Later

At Fairloan Mortgage Advisory, we regularly help homeowners restructure or refinance their loans after a change in family circumstances, including bereavement.

The most common observation? Families that plan early face much less financial disruption.

 

Our recommendation is to always:

• Review your ownership type when purchasing or refinancing.
  
  
• Ensure mortgage insurance coverage matches each borrower’s share.
  
  
• Keep wills and estate planning documents updated.
  
  
• Review loan tenure and refinancing options every few years.
  
  

If you are uncertain whether your current structure offers sufficient protection, our advisors can help assess your risks and propose coverage or refinancing strategies that give you and your family peace of mind.

 

Conclusion

Losing a co-owner is emotionally difficult, but the financial implications can be managed with the right preparation.

If the home is covered under HPS or MRTA, the insured portion of the loan will be cleared, easing the survivor’s burden. If not, the surviving owner becomes fully responsible for the mortgage and ownership transfer depends on whether the property is held in Joint Tenancy or Tenancy-in-Common.

 

Ultimately, the safest approach is proper planning before tragedy strikes. Align your ownership, insurance, and financing decisions from day one.

 

At Fairloan, we don’t just secure low rates, we help you secure long-term financial safety for your family’s most valuable asset: your home.