⚡ 80-10-10 vs SINGLE 90% LTV LOAN — $400K HOME
| Component | ❌ Single 90% Loan + PMI | ✅ 80-10-10 Piggyback |
|---|---|---|
| Down payment | $40,000 (10%) | $40,000 (10%) |
| First mortgage | $360K @ 7.0% = $2,394/mo | $320K @ 7.0% = $2,129/mo |
| Second mortgage | None | $40K HELOC @ 8.5% = $283/mo |
| PMI | $180/month 🔴 | $0 ✅ |
| Total monthly | $2,574/month | $2,412/month |
✅ Piggyback saves: $162/month = $1,944/year = $9,720 over 5 years
Piggyback Loan 80-10-10 2026 — Put Down 10%, Avoid PMI Completely, Save $162/Month
PMI costs $100–$300/month and builds you zero equity. A piggyback loan replaces PMI with a second mortgage that actually pays down your loan. Two loans, no PMI, lower total payment. Find lenders who offer 80-10-10 piggyback loans.
How the 80-10-10 Piggyback Works — Step by Step
Apply to TWO lenders simultaneously
You need a primary mortgage lender (for the 80% first loan) AND a HELOC lender (for the 10% second loan). Often the same lender offers both — but shop separately for best rates.
First mortgage: 80% of purchase price at conventional rates
At exactly 80% LTV, you qualify for standard conventional rates with NO PMI. Rate: roughly the same as any conventional 30-year rate. No PMI surcharge.
Second mortgage: 10% HELOC at close (simultaneously)
The HELOC funds simultaneously with the first mortgage at closing. This HELOC is immediately drawn to 10% of purchase price to cover the gap.
You bring 10% cash to closing
You contribute 10% down payment as normal. Total funded: 80% (first mortgage) + 10% (HELOC) + 10% (your cash) = 100% of purchase price.
Pay down the HELOC aggressively
The second mortgage has no prepayment penalty. Many buyers pay off the 10% second loan within 3–5 years. Once it's paid, your combined payment drops significantly.
All Piggyback Structures — Which Is Right for You?
| Structure | 1st Mortgage | 2nd Mortgage | Down | Best For |
|---|---|---|---|---|
| 80-10-10 ⭐ | 80% | 10% | 10% | Most buyers with 10% down |
| 80-15-5 | 80% | 15% | 5% | Buyers with only 5% cash |
| 80-5-15 | 80% | 5% | 15% | Between 10–20% down |
| 75-15-10 | 75% | 15% | 10% | Jumbo buyers to avoid jumbo LTV limits |
10% Down. No PMI. Lower Monthly Payment.
Not all lenders offer piggyback loans. Find lenders who do 80-10-10 piggyback — and compare rates from both the first and second mortgage simultaneously.
Piggyback Loan FAQ
What is an 80-10-10 piggyback loan?
An 80-10-10 piggyback loan is a home financing strategy using two simultaneous loans to avoid PMI with only 10% down. Structure: First mortgage: 80% of home price (conventional, no PMI). Second mortgage (piggyback): 10% of home price — typically a HELOC or home equity loan. Down payment: 10% cash. Total: 80% + 10% + 10% = 100% of purchase price. The key benefit: By keeping your first mortgage at exactly 80% LTV, you avoid Private Mortgage Insurance (PMI) entirely. On a $400K home, PMI typically costs $100–$300/month. The second mortgage (10%) does have its own interest cost — usually variable at Prime + 1–2%. The math question is: does the second mortgage cost less than PMI? Often yes — especially in the first years when your loan balance is high.Check your personalized rate →
What are the different piggyback loan structures?
Three main piggyback loan structures: 80-10-10 (most common): First mortgage 80% + Second mortgage 10% + Down payment 10%. Best for: buyers with exactly 10% down who want to avoid PMI. 80-15-5: First mortgage 80% + Second mortgage 15% + Down payment 5%. Best for: buyers with only 5% down who want to avoid PMI. Second mortgage cost higher (15% vs 10%). 80-20 (rare today): First mortgage 80% + Second mortgage 20% + 0% down. Was common pre-2008. Very limited availability today — requires excellent credit and income. Which structure is right for you depends on: How much cash you have. The cost of PMI on your first loan. The HELOC/second mortgage rates you qualify for. How quickly you plan to pay off the second mortgage.Check your personalized rate →
When does piggyback loan beat paying PMI?
Piggyback loan wins over PMI when the second mortgage cost is lower than PMI cost. Example — $400,000 home, 10% down: Option 1 — One 90% LTV loan: Loan: $360,000 at 7.0% = $2,394/month P&I. PMI: $180/month (0.6% of loan). Total: $2,574/month. Option 2 — 80-10-10 piggyback: First mortgage: $320,000 at 7.0% = $2,129/month. Second mortgage (HELOC): $40,000 at 8.5% = $283/month. No PMI. Total: $2,412/month. Monthly savings: $162/month with piggyback. Annual savings: $1,944. The piggyback wins until the second mortgage is paid off OR until you'd hit 80% LTV on the single loan (when PMI would drop off). Key: Compare the second mortgage rate to your PMI rate. If HELOC is 8.5% and PMI is 0.6% of $360K = $180/month, the HELOC costs $283/month for the $40K — higher monthly BUT you build equity in the second mortgage, whereas PMI is pure insurance premium.Check your personalized rate →
What are the risks of a piggyback loan?
Piggyback loan risks to understand: Variable rate second mortgage: Most piggybacks use a HELOC (Prime-based variable rate). If Prime rises, your second mortgage payment rises. In 2022–2023, this increased HELOC rates by 4%+ rapidly. Two loan qualifications: You must qualify with both lenders simultaneously. DTI calculations include both payments. Complexity: Two closings, two servicers, two payments. Less flexibility if you need to refinance later. Home value decline risk: If home values drop and you're at 100% LTV, selling is difficult. Closing costs on two loans: You pay closing costs on both loans simultaneously. Risk mitigation: Pay down the second mortgage aggressively (no prepayment penalties on most HELOCs). Set up auto-pay for both. Consider a fixed-rate second mortgage instead of a HELOC if you want rate certainty. Have a plan for when to pay off the second mortgage entirely.Check your personalized rate →
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