See whether an 80/10/10 piggyback (a first mortgage plus a second mortgage or HELOC) beats one bigger loan with PMI. Compare monthly payments, interest, PMI and the total cost over the years you plan to keep the loan, with a year-by-year table.
Last updated:
Home & split
$
years
Costs are compared over this period
%
%
Down payment = the rest (80/10/10 = 10% down)
Piggyback loans
%
%
Usually higher than the first
Second loan type
$
Appraisal, origination, title for the 2nd
Single loan with PMI
%
Same term as the first mortgage
% / year
Of the loan amount; typical 0.3%–1.5%
PMI ends when the balance reaches
Enter your values to see the result.
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How to use the Piggyback Loan Calculator (80/10/10)
Enter the home price and how many years you expect to keep the mortgage before selling or refinancing.
Set the split: first and second mortgage as a percent of the price (80 and 10 for an 80/10/10).
Enter both piggyback rates and terms, and choose a fixed second mortgage or a HELOC.
Enter the single-loan rate and PMI rate from your lender quote.
Press Compare loans to see monthly payments, cost over your time frame and the break-even year.
How the piggyback vs PMI comparison works
Both options borrow the same total amount. The difference is how you pay for the extra risk above 80% loan-to-value:
Piggyback: cost = interest on the first mortgage + interest on the second mortgage + second-loan closing costs.
Single loan: cost = interest on the larger loan + PMI premiums. PMI = loan amount × annual PMI rate ÷ 12, paid until the balance reaches 78% (or 80% on request) of the price.
Monthly payment for each loan: M = P × r ÷ (1 − (1 + r)^−n), with r = annual rate ÷ 12 and n = months.
Example: a $400,000 home with 10% down. The 80/10/10 piggyback borrows $320,000 at 6.5% for 30 years ($2,022.62) and $40,000 at 8.25% for 15 years ($388.06), a total of $2,410.67 a month. One $360,000 loan at 6.625% costs $2,305.12 plus $165.00 PMI (0.55%), or $2,470.12. The piggyback payment is lower here, and because the 15-year second loan is paid down quickly, it also costs less over seven years. A cheaper PMI quote or a longer second-loan term can flip the result, which is why the tool compares cost over your own time frame.
Which option tends to win
Situation
Usually favors
Why
High PMI quote (lower credit score, 5% down)
Piggyback
PMI is charged on the whole loan, not just the part above 80%
Excellent credit, cheap PMI (under about 0.4%)
Single loan
PMI is small and disappears after some years
Short second-loan term (10 to 15 years)
Piggyback
The second loan is paid off fast, so interest stops early
Plan to sell or refinance within a few years
Depends on rates
Compare the cost over that period, not the full term
Price just above the conforming loan limit
Piggyback
Keeps the first mortgage conforming and avoids jumbo pricing
Rising-rate environment with a variable HELOC
Single loan
A fixed loan with PMI removes payment risk
Tips before choosing
Ask for a written quote for both structures from the same lender on the same day so the rates are comparable.
Check whether the second loan is fixed or variable and whether it has a balloon payment.
If you expect your home value to rise, you may be able to drop PMI early with a new appraisal, which makes the single loan cheaper.
Paying extra on the second mortgage shortens it and is often the fastest way to cut total interest on a piggyback.
Frequently asked questions
What is an 80/10/10 piggyback loan?
It is a home purchase financed with two loans: a first mortgage for 80% of the price, a second mortgage or HELOC for 10%, and a 10% down payment. Because the first mortgage is at 80% loan-to-value, it needs no private mortgage insurance (PMI).
Is a piggyback loan cheaper than paying PMI?
It depends on the second loan's rate, how much PMI costs and how long you keep the loan. PMI usually ends once the balance falls to 78% of the original value, while second-mortgage interest continues until it is paid off. A piggyback tends to win when PMI is expensive (lower credit scores, smaller down payments) and the second-loan rate is close to the first; a single loan often wins when PMI is cheap.
How does this calculator compare the two options?
It adds up the money you do not get back over the years you choose: interest on both piggyback loans plus any extra closing costs for the second loan, versus interest plus PMI on the single loan. Principal is excluded because it builds equity either way.
When does PMI come off a conventional loan?
Under the federal Homeowners Protection Act, lenders must cancel borrower-paid PMI automatically when the scheduled balance reaches 78% of the original value, and you can ask to cancel it at 80% if you have a good payment history. Choose either rule in the calculator.
What other splits are common besides 80/10/10?
80/15/5 (5% down) and 80/5/15 are common, and 75/15/10 is sometimes used for condos. Some buyers use a piggyback to keep the first mortgage under the conforming loan limit and avoid a jumbo loan.
What are the risks of a piggyback mortgage?
Second mortgages and HELOCs often have variable rates, so payments can rise. A HELOC's payment can jump when the interest-only draw period ends. You also have two loans and two closings to manage, and refinancing later requires paying off or subordinating the second loan.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.