There's a way to buy a house with just ten percent down and pay no PMI at all — no monthly mortgage insurance, ever — and it's been sitting in plain sight for decades. It's called an 80/10/10, and most buyers have never heard of it because it's a little more work to set up, and the loan officer across the table doesn't always make more money steering you into it. So it just quietly doesn't come up.
The concept isn't a scam and it isn't a magic trick. It's just a structure — one that swaps a payment that goes nowhere for one that pays off your own house. Let me walk you through exactly how it works in plain English, the two real problems it solves, and the one downside nobody warns you about, so you can decide whether it beats the loan they're about to hand you.
What "80/10/10" actually means
Start with the name, because the name is the whole thing. Those three numbers are just how you split up the price of the house:
- The 80 is your first mortgage, covering eighty percent of the price.
- The first 10 is a second loan — usually a home equity line or a fixed second mortgage — covering another ten percent.
- The last 10 is your own cash down payment.
Eighty plus ten plus ten equals one hundred. You brought ten percent to the table, but you structured it so your main mortgage never crosses that eighty percent line. That line is the entire point — and in a second you'll see why.
How the piggyback dodges PMI — and why that beats "free" low-down loans
That eighty percent line is where PMI lives. On a normal loan, if you put down less than twenty percent, the lender makes you pay private mortgage insurance every single month. It protects the lender, not you, and PMI can run a couple hundred dollars a month on a typical loan. It's money that just evaporates.
Now watch what the 80/10/10 does. Because your first mortgage is exactly eighty percent — not a penny more — the lender has no reason to charge PMI. The second loan fills the gap between your ten percent down and that eighty percent line. So instead of paying monthly insurance that goes nowhere, you're paying down a second loan that actually builds your equity. That's the part that makes it beat the "free" low-down-payment loans people get excited about: with those, you're still handing over PMI every month. Here, every dollar works for you.
Ducking the jumbo loan and rate
The second problem the piggyback solves saves serious money for higher-priced buyers: jumbo. There's a limit called the conforming loan limit. It changes every year and sits north of $700,000 in most of the country — it's the biggest a normal mortgage can be before it becomes a jumbo loan. Cross that line, and the rules get stricter and the rate is often higher.
But if you split the loan 80/10/10, you can sometimes keep that first mortgage right under the conforming limit and finance the rest with the second loan. So you duck the jumbo rate and the jumbo underwriting entirely on your main loan. For a buyer sitting just over that line, that's real money every month.
| Structure | What you put down | Monthly insurance | Main watch-out |
|---|---|---|---|
| 80/10/10 piggyback | 10% cash + 10% second loan | None — no PMI | Second loan is often variable-rate |
| One loan with PMI | 10% cash (or less) | PMI every month until you reach 20% equity | Insurance payment that builds you nothing |
| Jumbo loan (above the limit) | Often 10–20%+ | Varies; stricter rules | Often a higher rate and tighter underwriting |
PMI is like paying rent on a room in your own house — money that leaves every month and buys you nothing you keep. The 80/10/10's second loan is more like a second, smaller payment on the house itself. Same cash out of your pocket up front, but one of those payments quietly builds your equity while the other just vanishes. The piggyback simply points that money at your own house instead of the insurer's.
The bank-versus-you angle: why loan officers skip it
I've been in this business since 2007 — before loan officers even needed a license — and I'll tell you straight: the 80/10/10 isn't a scam, and it isn't a magic trick either. It's just a structure. But here's why you don't hear about it more. It's two loans instead of one — more paperwork, sometimes a second lender, more coordination to close. Some loan officers simply find it easier, and sometimes more profitable, to put you in one loan with PMI and move on.
It's not always malice. Sometimes it's just friction. But the result is the same: you don't get shown the cheaper door. Which means the burden falls on you to know the structure exists before you sit down.
The honest downside: the variable second loan
I owe you the honest downside. That second loan — the first ten — is very often a variable rate, especially if it's a home equity line. So while your main eighty-percent mortgage is a nice fixed payment, the second piece can move up and down with rates and climb on you.
That's why an 80/10/10 is at its best when you plan to pay that second loan down fast, or when the numbers clearly beat PMI even after the higher rate on the second loan. The only way to know is to run both side by side. One more note: the second loan here is typically a non-agency product — a HELOC or a private second mortgage — so its rate, terms, and availability vary quite a bit by lender. Read that second note harder, not softer.
Who the 80/10/10 fits — and who should just take one clean loan
So who does this fit? The buyer who's got ten percent down but not twenty and is tired of throwing money at PMI every month. And the higher-priced buyer sitting just over the jumbo line who wants to keep their main mortgage conforming.
Who should run from it? If that variable second-loan rate would stretch your budget, or you won't prioritize paying it off, one clean loan might serve you better. No shame in the simpler path — just choose it with the real numbers in front of you.
See how it actually fits your numbers
Run the free calculator to see your real monthly numbers — piggyback or otherwise — before anyone else does the math for you. It's free, and I don't originate loans, so there's nothing being sold on the other end.
Open the Free Calculator →Want the plain-English breakdown of the creative ways to structure a mortgage — including exactly when a piggyback beats PMI? That's what the free creative financing guide is for. No pitch, no sales guy waiting to call — just the information, so you walk in already knowing the option they might not mention.
Frequently asked questions
Related free resources: Affordability Calculator · creative financing guide · all calculators
Educational content only — not financial, mortgage, or legal advice, and not a loan offer or solicitation. Timothy George is the founder of Infinity Financial Mortgage Corporation and has been in the mortgage business since 2007; he is not a currently-licensed loan originator and does not originate loans. Private mortgage insurance (PMI), conforming loan limits, and jumbo underwriting are explained in independent consumer resources from the Consumer Financial Protection Bureau — see the CFPB on private mortgage insurance and on second mortgages and junior liens. The second loan in an 80/10/10 (a HELOC or private second mortgage) is a non-agency product, so its rate, terms, and availability vary by lender. Program terms, conforming loan limits, and rules change over time and vary by lender — confirm the current rules and your specific situation with a currently-licensed professional before you act.