80-15-5 Piggyback vs PMI 2027 Calculator
Compare an 80-15-5 piggyback loan structure (first mortgage 80%, second mortgage 15%, 5% cash down) to a 5%-down loan with PMI for 2027. Critical when avoiding PMI is the goal but the second mortgage rate is higher.
The 80-15-5 Structure
Piggyback (also called combo loan or 80-10-10/80-15-5) splits the financing into two mortgages plus a cash down payment. The first mortgage stays at the conforming 80% LTV — avoiding PMI altogether. The second mortgage (HELOC or fixed second) covers another 15%, leaving only 5% as cash down. This was wildly popular pre-2008 then collapsed; revived since 2020 as PMI premiums rose and lenders aggressive about HELOC products.
When Piggyback Beats PMI
Piggyback wins when the second mortgage rate is reasonable (3-4 points above the first), PMI rates are high (1%+), and you have 10+ year hold horizon. The first mortgage stays at conforming rates and never carries PMI. The HELOC second can be paid down aggressively, then closed once equity exceeds 20%. Total lifetime cost typically 5-15% lower than the PMI alternative.
When PMI Wins
PMI wins when (a) PMI premium is low (0.5% or under, possible with 740+ credit and conventional 95%), (b) you plan to drop PMI fast through appreciation request, (c) the second mortgage rate is far above the first (5%+ spread). The single-loan simplicity also reduces refi cost — refi cancels both loans in piggyback structure, adding complexity and costs.
PMI Auto-Drop vs Borrower Request
Federal Homeowners Protection Act requires PMI auto-drop at 78% LTV based on the original purchase price amortization schedule. You can REQUEST PMI removal at 80% LTV, but lenders may require a $400-600 appraisal proving current value. With strong appreciation, you can request removal as soon as 1-2 years post-purchase. Without appreciation, auto-drop typically takes 8-12 years on a 30-year loan.
Sources: cfpb.gov, hud.gov, freddiemac.com, fanniemae.com. Last updated: May 2026.