An 80-10-10 loan is a piggyback loan, which means that you take out two mortgages, one big and one small. Your first mortgage is for 80% of the purchase price, the second one is for 10%, and you'll make a 10% down payment.
The 80/10/10 piggyback loan is a popular strategy for financing a home purchase with a lower down payment than the traditional 20%. It works by combining two separate mortgages with a 10% down payment from your savings.
An 80-10-10 mortgage is structured with two mortgages: the first being a fixed-rate loan at 80% of the home's cost; the second being 10% as a home equity loan; and the remaining 10% as a cash down payment.
You can avoid paying PMI by providing a down payment of more than 20% when you take out a mortgage. Mortgages with down payments of less than 20% will require PMI until you build up a loan-to-value ratio of at least 80%. You can also avoid paying PMI by using two mortgages, or a piggyback second mortgage.
This insurance, which typically runs about 0.5 to 1.5% of your loan amount per year, is designed to protect the lender's investment in your home, signaling your commitment to the purchase. Reaching the 20% threshold allows you to eliminate this additional cost, which in turn will reduce your monthly mortgage payments.
80-10-10 piggyback loans FAQs
An 80-10-10 piggyback loan translates to: a first mortgage for 80% of the sale price; a second lien for 10%; and a 10% down payment. The second mortgage “piggybacks” on top of the first. Do piggyback loans still exist? Yes, 80-10-10 piggyback loans are still available.
The 80/10/10 budget is just one way this can be done! In this approach, like other popular budgets, 80% of income goes towards spendings, such as bills, groceries, or anything else needed. 10% of income goes directly into savings to ensure that money is added regularly. The last 10% of income goes to charity.
Because the law allows only the mortgagee to foreclose, MERS had to either file court papers in its own name or transfer the mortgage back to the real owner.
For example, the same borrower might pay for the home with: a 10 percent down payment, 80 percent main mortgage, and a 10 percent “piggyback” second mortgage. In this scenario, the borrower is still borrowing 90 percent of the value of the home, but the main mortgage is only 80 percent.
One of the most common reasons to get a piggyback loan is to avoid paying private mortgage insurance (PMI), which protects the lender from default. It's cheaper for the homeowner to get two mortgages, and the interest is usually tax deductible.
If your income varies from month to month, use your average income in the calculation. Most banking institutions will calculate your debt-to-income ratio when considering your loan application. The generally acceptable debt to income ratio is up to a maximum of 30%.
The share of piggybacked Federal Housing Administration (FHA) home purchase loans rose by more than seven percentage points from June 2022 to June 2024, going from 10.8% to 18%. In the same period, the piggyback share increased from 2.2% to 3.6% for conventional purchase loans backed by Fannie Mae and Freddie Mac.
In simple terms… 80/10/10 Raw meal is based on 80% meat, 10% bone and 10% Offal (usually split 5% liver and 5% other secreting organ). For example, our Beef 80/10/10 is 80% beef (skirt, trim etc), 10% bone (non-load bearing), 5% liver and 5% secreting organ (kidney, spleen etc) which makes up the 10%.
Many borrowers like to split the loan 50:50, but you can split it in a different way. For example, if you prefer the security of a fixed rate home loan but want to make full use of an offset account, you might prefer to split your loan into something like 80% fixed and 20% variable.
Benefits of an 80-10-10 Mortgage
Lower monthly payment: It's possible your monthly mortgage payment will be lower as you're not paying PMI, even if you're paying off a second loan concurrently. Smaller down payment without PMI: Many lenders require you to pay mortgage insurance if you can't make the 20% down payment.
An 80/10/10 piggyback loan is a type of loan that involves getting two mortgages at once: One is for 80 percent of the home's value and the other is for 10 percent. The piggyback strategy lets you avoid private mortgage insurance or having to take out a jumbo loan.
YOU WILL WRECK YOUR CREDIT for as long as you don't pay your second mortgage, plus seven years. This is worse than walking away now because your credit will only take a hit for the bad mortgage from the date of the foreclosure plus seven years.
80/10/10 Loan Details
80% comes from your first mortgage. 10% comes from a second home equity mortgage. 10% comes from a cash down payment, which is determined by the purchase home price. No private mortgage insurance (PMI) is needed even if your down payment is under 20%.
The 10-80-10 rule is a leadership principle that says that to train and lead effectively you must do the following: Spend the first 10 percent of the time communicating your vision for the thing. Allow others to spend the next 80 percent of the time moving the thing forward.
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
When you don't have 20% to put down, an 80-10-10 mortgage can help. It's okay to dream big. For those who might not have a 20% down payment available, Chevron Federal Credit Union can help with an 80-10-10 mortgage.
Can you get two loans from the same bank? Yes. Many banks and lenders will allow you to take out more than one loan, but they typically have limits. These are a few lenders that cap the number of loans or amount of money you can borrow.
Borrowers often use piggyback mortgages to avoid paying private mortgage insurance on a conventional loan when putting down less than 20%. They can also leverage piggyback loans to reduce their down payment or buy a higher-priced home.