What is an 80/10/10 mortgage loan is a question that easily comes up to the borrower’s mind. This is basically a creative way to avoid paying a PMI – private mortgage insurance, and a convenient way to purchase or refinance or consolidate debt, employing the benefits of combining a first and a second mortgage or trust.

This loan format is often referred to as a "piggyback loan," where a borrower pays 10% down on the home & uses the second mortgage for the next 10% down to avoid pmi payments. Example Monthly PMI Costs. Here is a chart of estimated monthly PMI costs based on a rate of 0.55%.

Most banks don’t want you to have a mortgage exceeding 80% of your home’s value. If you pay off a $10,000 personal loan at 10% interest over five years, you’d pay $2,748 in interest over the life.

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80-10-10 Mortgage. By Investopedia Staff. An 80-10-10 mortgage is a loan where the first and second mortgages happen simultaneously. The first mortgage lien has an 80-percent loan-to-value ratio (LTV ratio), the second mortgage lien has a 10-percent loan-to-value ratio, and the borrower will make a 10-percent down payment.

Such kind of loans are popularly known as 80/10/10 loans, where the first mortgage is 80 percent of the home value, second mortgage or HELOC is 10 percent and the rest 10 percent is the down payment by the borrower. What are the benefits of an 80/10/10 loan? PMI is required on all conventional loans with less than 20% down payment.

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It is called 80-10-10 mortgage loans; The Mechanics 80-10-10 Mortgage Loans. Home Buyers who have at least a 10% down payment and want to avoid paying a monthly private mortgage insurance premium can get a first mortgage of 80% Loan to Value, LTV, and a second mortgage loan or a Home Equity Line of Credit, also known as HELOC, of 10% so the.

If you’ve found your dream home, but the 20% down payment is a stretch, consider Santander Bank’s 80-10-10 Combination Loan., Also known as a piggyback loan, which an 80-10-10 Combination Loan combines a mortgage with a variable rate home equity line of credit (HELOC) to lower your down payment.