What Are The Best Interest Rates for 80/20 Loans?

The best interest rates for 80/20 loans is the lowest interest rate available. Given the changing nature of interest rates and depending on when you read this article, the prevailing loan interest rates may be higher or lower than any rate that would be quoted here. It is important however to understand the nature of an 80/20 loan and what interest rates may possibly be.

What Is an 80/20 Loan

An 80/20 loan is one that consists of a primary loan for 80 percent of the mortgage amount and a second loan from the same or different lender for the remaining 20 percent. This results in a requirement by the lender for primary mortgage insurance or PMI.  PMI is always required of borrowers who are unable to pay a minimum 20 percent down for a mortgage loan. Since these types of borrowers tend to be a higher risk, you would expect that the loan interest rates for 80/20 to be 5 to 7 points higher than loans made to prime borrowers who can meet the down payment requirement.