What Is a Piggyback Loan?

Introduction

A piggyback loan combines a first mortgage with a second mortgage so you can put down less than 20% and avoid PMI. Common structures: 80-10-10 (80% first, 10% second, 10% down) or 80-15-5. See What Is a Second Mortgage, What Is PMI, and What Is LTV.

Frequently Asked Questions

What is a piggyback loan?

A piggyback loan combines a first mortgage (e.g., 80% LTV) with a second mortgage (e.g., 10% or 15%) so you can avoid PMI while putting down less than 20%.

What is 80-10-10?

80-10-10 means: 80% first mortgage, 10% second mortgage, 10% down payment. The combined LTV is 90%, so no PMI on the first mortgage.

What is 80-15-5?

80-15-5 means: 80% first mortgage, 15% second mortgage, 5% down payment. The second mortgage covers the gap so you avoid PMI.

When does a piggyback make sense?

When the cost of the second mortgage (rate + fees) is less than PMI over the time you expect to have it. Compare total costs.