Piggyback loan (80-10-10)
A structure that splits financing into a first mortgage plus a smaller second loan — commonly 80-10-10 — to avoid PMI without a full 20% down payment.
What does piggyback loan mean?
A piggyback loan pairs a first mortgage covering 80% of the price with a second loan (often a HELOC or home equity loan) covering 10%, leaving you 10% down — an 80-10-10. Keeping the first mortgage at 80% loan-to-value avoids private mortgage insurance. The trade-off is a second payment, usually at a higher rate, so compare the total cost against simply paying PMI and cancelling it at 20% equity.
Frequently asked
What is an 80-10-10 loan?
An 80-10-10 is a piggyback structure: an 80% first mortgage, a 10% second loan, and 10% down. Keeping the first mortgage at 80% loan-to-value avoids PMI without needing a full 20% down payment.
Is a piggyback loan better than paying PMI?
It depends on the second loan’s rate. A piggyback avoids PMI but adds a second payment, often at a higher rate.
Compare the total monthly cost — and how fast PMI would cancel — before deciding; sometimes just paying PMI and cancelling it at 20% equity is cheaper.
Put it to use
All glossary terms Combination (Piggyback) Mortgage Calculator
Model an 80-10-10 piggyback structure to avoid PMI with a first and second mortgage.
Mortgage Calculator with PMI
Include private mortgage insurance in your payment and find out exactly when PMI drops off.
Down Payment Calculator
Turn a down-payment percentage into dollars and see whether you clear the 20% PMI threshold.