Working out your 80 20 home loan

If you are planning to buy a house worth $100,000 with the 80/20 mortgage for 30 years, you’ll pay the principal and interest both of the 80% mortgage and the 20% mortgage.  For the clarification purposes, let us say that your first mortgage gives 6.25% interest rate and the second mortgage has a 7.75% interest rate.  This is how your payment for the 80/20 loan will look like:Your first loan (80%)•    $80,000 at 625% rate = $492.57 monthly principal and interestYour second loan (20%)•    $20,000 at 7. 75% rate = $152.51 monthly principal and interestYour total monthly payment•    $645.10 With 80 20 home loan, you are hitting 2 birds in one stone.  First, you can move to your new house without having to part with a large sum of money.  Second, you can enjoy the same or lower repayment amounts as that of a 100% mortgage.