Piggyback Loan: Avoid PMI with an 80/10/10 or 80/15/5 Structure
Quick Facts
- Avoid private mortgage insurance (PMI)
- Combines a first and second mortgage
- Popular 80/10/10 and 80/15/5 options
- Lower down payment needed
- Works for purchase or refinance
What Is a Piggyback Loan?
A Piggyback Loan uses two mortgages—typically an 80% first mortgage and a smaller second mortgage—to help borrowers avoid PMI and reduce their required down payment. This structure is ideal for buyers who want flexibility and lower upfront costs.
Piggyback Loan Benefits
- Avoid PMI with an 80/10/10 or 80/15/5 structure
- Lower down payment required
- Flexible credit and income guidelines
- Works for purchase or refinance
- Helps keep the first mortgage below conforming limits
Piggyback Loan Eligibility Requirements
- Acceptable credit profile
- Stable income and employment
- Adequate reserves (varies by lender)
- Property must meet appraisal standards
- Full underwriting review required for both loans
How a Piggyback Loan Works
Borrowers take out a first mortgage for 80% of the home price and a second mortgage for 10–15%, reducing the required down payment and eliminating PMI. Lenders review credit, income, reserves, and property value for both loans.
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