Piggyback Loan vs PMI Comparison Calculator
Compare an 80/10/10 piggyback loan against private mortgage insurance (PMI) on a single mortgage with under-20% down. See monthly costs, lifetime interest, and which option saves more — using 2026 rates.
| PMI | Piggyback | |
| Monthly Payment | — | — |
| Monthly PMI | — | — |
| Total Monthly Cost | — | — |
| Lifetime Cost | ||
| Total Interest Paid | — | — |
| Total PMI Paid | — | $0.00 |
| Total Cost of Loan | — | — |
How a Piggyback Loan vs PMI Comparison Works
A piggyback loan structure (commonly 80/10/10) splits the financing into two mortgages — a primary loan covering 80% of the purchase price and a secondary loan (usually a HELOC or fixed second) covering 10%, with 10% down. This avoids private mortgage insurance (PMI), which lenders require when down payments fall below 20%. This calculator compares the total monthly and lifetime cost of both paths using your actual numbers.
PMI on a conventional loan typically costs 0.4-1.5% of the loan balance per year, paid monthly, until you reach 22% equity automatically or request cancellation at 20% equity (source: cfpb.gov). A piggyback avoids PMI entirely but charges higher interest on the second lien — often 2-4 percentage points above primary mortgage rates.
2026 Rate Environment and Piggyback Strategy
With the Federal Reserve holding the federal funds rate at 4.25-4.50% as of early 2026, average 30-year mortgage rates remain near 6.5-7.0% per the Freddie Mac Primary Mortgage Market Survey (source: freddiemac.com/pmms). HELOC and second-mortgage rates currently range 8-11% based on Prime + spread, making piggyback math tighter than during the low-rate era.
Piggyback loans tend to win when: (1) your second-mortgage rate is below the all-in cost of PMI, (2) you plan to keep PMI for many years (slow equity buildup), or (3) you want to keep your first mortgage conforming to avoid jumbo-loan pricing. PMI wins when your second-loan rate is high and you can drop PMI within 5-7 years through home appreciation or principal payments.
Breaking the 80/10/10 Math Down
The "80/10/10" naming convention is shorthand: first loan covers 80% LTV, second loan covers 10%, you bring 10% down. Other splits exist — 80/15/5 (5% down) and 75/15/10 (luxury homes) — but 80/10/10 is most common because it keeps the first mortgage at or below the 80% LTV PMI threshold while allowing a moderate down payment.
Tax-wise, mortgage interest on both the first and the piggyback second loan is generally deductible up to $750,000 of qualified residence indebtedness for loans originated after December 15, 2017, per IRS Publication 936 (source: irs.gov/publications/p936). PMI deduction phase-out rules have shifted multiple times — check current eligibility before relying on it.
Refinancing and Combining the Loans Later
Many borrowers refinance both loans into a single new mortgage once home appreciation pushes the combined LTV below 80%. This eliminates the second mortgage entirely and locks in one rate. Run our refinance savings calculator to model that scenario, and compare against the recast vs refinance comparison for lump-sum payoff alternatives.
Last updated April 2026. Sources: cfpb.gov, freddiemac.com, irs.gov.