A piggyback loan pairs a first mortgage for 80% of the price with a second mortgage or home equity line for part of the rest, commonly 10% (an 80/10/10 with 10% down). Keeping the first mortgage at 80% avoids PMI and can keep a large loan under the conforming limit. The second loan usually has a higher, often variable rate, so compare it carefully with simply paying PMI.
How it works
On a $500,000 home with 10% down: a $400,000 first mortgage (80%), a $50,000 second mortgage (10%) and $50,000 down. Because the first mortgage is at 80%, there’s no PMI.
Common structures
- 80/10/10: 10% second, 10% down.
- 80/15/5: 15% second, 5% down; fewer lenders offer it.
- Jumbo avoidance: a conforming first mortgage at the county limit plus a second for the rest; see jumbo loans.
Piggyback vs. PMI
| Piggyback | One loan with PMI | |
|---|---|---|
| Mortgage insurance | None | PMI until about 20% equity |
| Second payment | Yes, often variable rate | No |
| Tax treatment | Interest may be deductible | Ask a tax professional |
| Flexibility | Pay off the second faster to cut cost | PMI ends automatically at 78% |
Model the second loan with the HELOC calculator. If PMI would be cheap because your credit is strong, a single loan is often simpler and cheaper.
Risks
- A variable-rate second can rise; test the payment with the rate sensitivity tool.
- Two loans means two payments, and refinancing later requires the second lender’s agreement or payoff.
- Fewer lenders offer piggybacks, so pricing can vary widely; compare with compare mortgage offers.
Common questions
What is an 80/10/10 loan?
A first mortgage for 80% of the price, a second mortgage for 10%, and a 10% down payment.
Is a piggyback loan better than paying PMI?
Sometimes. With strong credit, PMI can be cheaper and simpler; compare the second loan’s interest with the PMI cost.
Can a piggyback avoid a jumbo loan?
Yes, by keeping the first mortgage at the conforming limit and financing the rest with a second.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.