Will I have to pay PMI?
Typically PMI, Private Mortgage Insurance, is required if your LTV is greater than 80%.
However, if you do need to borrow more than 80% there may be another option that makes more sense financially. Instead of taking out one mortgage for, say, 90% of the property value, you can take out a first mortgage for 80% and a second mortgage for 10% of the value. Although the second mortgage will be at a higher interest rate (because second mortgages are riskier for the lender) the higher rate will only apply to a relatively small loan amount so it is likely that the combined payment will be less than the payment of a 90% loan plus the monthly premium for PMI.
If you are borrowing more than 80% of your property’s value, your mortgage broker should be able to advise you which option is better for you in your situation.
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