Piggyback loans more costly in today's market

Most buyers better off with mortgage insurance, but exceptions exist

The premier event for luxury agents and brokers
Luxury Connect | Oct. 16-18 | Beverly Hills

A piggyback is a second mortgage taken out at the same time as a first mortgage, as a way of borrowing a larger total amount. The first mortgage is for 80 percent of property value, and therefore does not require mortgage insurance, while the piggyback is for 5 percent, 10 percent, 15 percent or 20 percent of value. Instead of a mortgage insurance premium, the borrower pays a higher rate on the piggyback than on the first mortgage.