80-10-10 Mortgage

A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an 80% loan-to-value ratio, the second position lien has a 10% loan-to-value ratio and the borrower makes a 10% down payment. 80-10-10 mortgage transactions are piggy-back mortgage transactions, and are frequently used by borrowers to avoid paying private mortgage insurance.

Investopedia Says:
The economics of using a second lien rather than paying private mortgage insurance are driven by home price appreciation. If a borrower expects the value of the home to increase quickly, it might be more economical to pay private mortgage insurance for a period of time until the loan-to-value ratio for a first mortgage falls to 78% or below. At this point, the private mortgage insurance can be eliminated, eliminating the need for a second mortgage in a piggy-back transaction.

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A type of Piggyback Mortgage in which a first mortgage covering 80% of the value of the home is combined with a Second Mortgage that covers 10% of value. The remaining 10% is a cash Down Payment. The purpose of this combination of loans is to avoid the use of Mortgage Insurance. A 80-15-5 mortgage is set up in a similar manner, except the down payment is only 5% of value.
Example: Mortgage Brokers can set up 80-10-10 mortgages for borrowers who do not want to use private mortgage insurance. The borrower avoids the expense of the insurance premiums but pays a higher interest rate on the loan combination.