What is an 80-10-10 piggyback loan?
A piggyback splits one purchase into two loans — classically 80-10-10: a first mortgage for 80% of the price, a second loan for 10%, and 10% down. Because the first mortgage sits at 80% loan-to-value, it carries no PMI; the second loan replaces the insurance premium with interest on a smaller balance. The same structure has a second job: on expensive homes, capping the first mortgage at the conforming loan limit (just over $800,000 in recent years, per FHFA) keeps you in conventional pricing and underwriting instead of jumbo. Whether it beats simply paying PMI is a numbers question — PMI cancels as equity grows; a second lien’s interest does not cancel itself.
Last reviewed 2026-08-24
| Key number | Value | Source |
|---|---|---|
| Baseline conforming loan limit (one-unit, standard markets) | just over $800,000 in recent years; higher in designated high-cost areas | FHFA conforming loan limit values |
The structures, and what each is for
The naming reads first/second/down: 80-10-10 (10% down, no PMI), 80-15-5 (5% down, no PMI, larger second), and variants like 75-15-10 that pull the first mortgage down to 75% LTV — a threshold where conventional pricing adjustments improve, which can make the whole package price better than the 80% version. The second lien is commonly a home-equity line or a fixed second, and its rate is higher than the first’s: the structure’s economics live in the interplay between the three pieces, not in any one of them.
Job one: replacing PMI — run it against actual PMI
PMI on a strong-credit borrower is often cheaper than its reputation, and it cancels: automatically at 78% LTV by amortization, on request at 80%, and sometimes earlier through appreciation with an appraisal. The piggyback’s second lien charges interest until you pay it off. So the honest comparison is monthly PMI until likely cancellation versus second-lien interest until likely payoff — strong-credit borrowers with fast-appreciating homes frequently do better just taking PMI, while borrowers facing expensive PMI quotes or planning aggressive paydown favor the piggyback.
Job two: staying under the conforming limit
Jumbo loans — those above FHFA’s conforming limit — are underwritten to individual lenders’ standards: typically stricter reserves, tighter ratios, larger required down payments. A piggyback caps the first mortgage at the conforming line and covers the rest with the second, letting a buyer of a $1M-plus home keep conventional qualification and pricing on the bulk of the borrowing. For self-employed borrowers and others who clear conventional automated underwriting more easily than jumbo overlays, this is often the structure’s biggest value — bigger than the PMI question.
The trade-offs to price in
Two closings’ worth of paperwork and some added fees; a second-lien rate meaningfully above the first (and variable, if it is a HELOC — payments rise if rates rise); and a complication at refinance time, since the second lender must agree to resubordinate or be paid off when you refinance the first. None of these is disqualifying; all of them belong in the comparison before you choose the structure for elegance rather than arithmetic.
Pricing the three-way comparison
The real decision is three quotes on the same day: one loan with PMI, one loan at a higher balance without PMI where the lender absorbs it in pricing, and the piggyback. Which wins depends on your credit score, the PMI market’s appetite for your profile, and second-lien pricing that week. Ralo — an automated mortgage broker, not a lender — prices scenarios across lenders from one application, which is exactly the comparison this decision needs. Compare illustrative structures
Ralo is an automated mortgage broker — not a lender — that compares multiple lenders from one application, earns a thin commission, and shows rate, APR, and fees upfront. Rates shown anywhere on this site are illustrative examples, not a loan approval, rate lock, or commitment. Available where licensed: California, Colorado, and Texas.