A piggyback purchase structure using an 80% first mortgage, 15% second mortgage, and 5% down payment.
An 80-15-5 loan is a piggyback purchase structure consisting of an 80% first mortgage, a 15% second mortgage, and a 5% borrower down payment.
It reduces the buyer’s cash down payment by using a larger junior mortgage. The buyer still finances 95% of the purchase price through two liens.
An 80-15-5 structure may let a qualified buyer purchase with less cash while keeping the first mortgage at 80% of the basic price split. That can change the first loan’s mortgage-insurance treatment, but it also creates a substantial second-lien balance and payment.
With only a 5% down payment, the borrower begins with a smaller equity cushion than under an 80-10-10 arrangement. A decline in value can make later refinancing or selling more difficult because both mortgages must be handled.
The second loan is not down-payment assistance unless it is part of a qualifying assistance program. It is ordinary borrowed debt that must be disclosed and included in underwriting.
Borrowers may see an 80-15-5 option during preapproval when comparing low-down-payment conventional financing, mortgage insurance, and simultaneous second mortgages.
The first lender evaluates the full structure, including:
95% CLTV in the basic split5% down-payment funds and closing costsAvailability is lender-specific. The percentage label is a description, not a government or conventional program guarantee.
Malik buys a $500,000 home:
| Funding source | Percentage | Amount |
|---|---|---|
| First mortgage | 80% | $400,000 |
| Piggyback second mortgage | 15% | $75,000 |
| Down payment | 5% | $25,000 |
| Purchase price | 100% | $500,000 |
The first-loan LTV is 80%. Combined mortgage debt is $475,000, so CLTV is 95%. Malik must qualify for both payments and bring the down payment plus any closing funds not financed or credited.
If the second mortgage has a higher variable rate, the cost and payment exposure can change even when the first mortgage is fixed.
| Feature | 80-15-5 | 80-10-10 |
|---|---|---|
| First mortgage | 80% | 80% |
| Second mortgage | 15% | 10% |
| Down payment | 5% | 10% |
| Basic CLTV | 95% | 90% |
| Starting equity cushion | Smaller | Larger |
| Second-lien payment exposure | Higher if other terms are comparable | Lower if other terms are comparable |
The 80-15-5 requires less cash down but shifts another 5% of the price into junior debt.
A single high-LTV conventional mortgage may carry PMI but has only one mortgage loan. An 80-15-5 may avoid PMI on the first lien under the lender’s terms, but introduces a second rate, payment, lien, and closing process.
Borrowers should compare:
Piggyback Loan is the broad category. An 80-15-5 loan is a specific high-combined-leverage version.
80-10-10 Loan uses 10% down and a 10% second, producing lower combined leverage in the basic structure.
Community Second Mortgage is subordinate financing under an approved assistance or affordable-lending program. Its repayment and CLTV treatment can differ from a market-rate piggyback loan.
Down Payment is the buyer’s contributed equity. The 15% second mortgage is debt, not part of the borrower’s 5% down payment.
15% second mortgage part of the borrower’s down payment?
No. It is borrowed money; the borrower contributes the separate 5% down payment.5% of the price but increases second-lien debt and combined leverage by the same amount.