Piggyback Loan Calculator
Calculate a piggyback (80/10/10 or 80/15/5) loan to avoid private mortgage insurance — first mortgage, HELOC, combined monthly payment, and lifetime PMI savings, free and instant.
| Loan Structure | |
| First Mortgage Amount | — |
| Second Loan Amount | — |
| Cash Down Payment | — |
| Total Home Price | — |
| Monthly Payments | |
| First Mortgage Payment | — |
| Second Loan Payment | — |
| Combined Monthly Payment | — |
| Single Loan With PMI Comparison | |
| Single Loan Payment (P&I) | — |
| Monthly PMI | — |
| Single Loan Payment + PMI | — |
| Total PMI Paid (lifetime) | — |
How a Piggyback Loan Works
A piggyback loan is a financing strategy where a homebuyer takes out two mortgages simultaneously to avoid private mortgage insurance (PMI), which is typically required when the down payment is less than 20%. The structure splits the home purchase into a first mortgage covering 80% of the price, a second loan covering 10% to 15%, and a cash down payment of 5% to 10%. Because the first mortgage stays at 80% loan-to-value, no PMI is required.
The two most common piggyback configurations are 80/10/10 (80% first, 10% second, 10% down) and 80/15/5 (80% first, 15% second, 5% down). The second loan is often a home equity line of credit (HELOC) with a variable rate or a fixed-rate second mortgage. According to the Consumer Financial Protection Bureau, piggyback loans surged after the 2024-2026 rate environment when PMI premiums and rate buy-downs became expensive.
When a Piggyback Loan Saves Money
Piggyback loans make financial sense when the blended cost of the first and second loan is lower than a conventional 90% or 95% loan plus PMI. PMI typically costs 0.3% to 1.5% of the loan amount per year, depending on credit score and down payment size, per Freddie Mac data. On a $400,000 home with 10% down, PMI alone can add $1,800 to $5,000 per year to housing costs.
Run the numbers carefully: second loans charge 1% to 3% more than first mortgages, and HELOCs are variable-rate. If second-loan rates are very high (over 10%), PMI may actually be cheaper. Use this calculator to compare side-by-side. If you have other loan options to weigh, see our PMI calculator or FHA vs conventional comparison.
Risks of Piggyback Loans
The biggest risk is the second loan's variable rate (most HELOCs adjust with the prime rate). If rates rise 2-3 percentage points, your monthly payment can increase substantially. Second loans also typically have shorter amortization (10-20 years), so the monthly payment is heavier than the loan size implies. If home values fall, you can quickly become underwater on combined balances.
The 2007-2008 crisis exposed how piggyback structures amplify losses in declining markets — borrowers ended up owing more than their homes were worth, with no equity to refinance out of high second-loan rates. Today's piggyback loans require stronger credit (typically 700+ scores) and more income verification.
Piggyback vs Single Mortgage With PMI — Tax Treatment
Mortgage interest on both the first and second loans is deductible up to the $750,000 limit set by the Tax Cuts and Jobs Act (TCJA), which was extended by the One Big Beautiful Bill Act (OBBB, P.L. 119-21, July 2025). PMI is also deductible for some borrowers based on income limits, but the deduction has historically been less reliable. See the IRS Publication 936 for current rules.
Last updated May 2026. Sources: cfpb.gov, freddiemac.com, irs.gov.