Piggyback & 80-10-10
Piggyback loans (80‑10‑10) in Ohio — skip PMI without waiting for 20% down.
A piggyback loan splits your financing in two: a first mortgage at 80% of the price and a smaller second mortgage on top, closed the same day. The first stays at 80%, so there's no private mortgage insurance. Sometimes that's the cheapest way to buy with 10% down. Sometimes it isn't. I run both versions on your real numbers before you pick one.
Closings average about 13 days · No SSN or credit pull to start
How a piggyback loan works
Conventional lenders charge private mortgage insurance when your loan is more than 80% of the home's price. PMI protects the lender, not you, and you pay it every month until you reach 20% equity. A piggyback gets around that by never letting the first mortgage go above 80%. The gap between your down payment and 20% is covered by a second mortgage that closes at the same table, on the same day.
Illustrative, close to the Greater Cincinnati July 2026 median sale price of $329,450. The first mortgage is exactly 80% of the price, so no PMI is required on it.
80 / 10 / 10
First / second / down payment
$0
PMI on the first mortgage
$832,750
2026 conforming limit, 1-unit
5 yrs
Minimum before a balloon can come due
Sources: Fannie Mae Selling Guide B2-1.2-02 to B2-1.2-04 (Oct 2026 edition); FHFA 2026 conforming limits. Terms vary by lender and are not an offer.
The honest math: piggyback vs one loan with PMI
The second mortgage almost always carries a higher rate than the first. A common pattern is a 6.5% first paired with a second at 8% to 9% or more. So a piggyback isn't automatically cheaper. You're trading a PMI premium for a higher rate on a slice of the loan. Here's that trade on a typical Cincinnati purchase.
Illustrative rates, not a quote. The gap is $78 a month. If your PMI quote is above about $78, the piggyback costs less each month. Below that, the single loan with PMI wins. PMI also cancels on its own schedule, while the second mortgage has to be paid off.
The part most comparisons skip: PMI goes away. You can ask to cancel it at 80% of the original value and it ends automatically at 78%. A second mortgage only goes away when it's paid off or refinanced. So the right question isn't just which payment is lower this month. It's which one costs less over the years you'll actually keep the loan. If you plan to pay the second down fast, the piggyback usually looks better. If you'll ride it for 20 years, it often doesn't.
Three reasons to use one
| Reason | How the piggyback helps | Who it fits | Watch out for |
|---|---|---|---|
| Skip PMI | First mortgage stays at 80%, so no mortgage insurance on it | Buyers with 10% down and strong credit, where PMI quotes come in high | The second's higher rate. Compare the actual quotes |
| Stay under the conforming limit | Keeps the first at or under $832,750 (higher in parts of California) so it's priced as conforming instead of jumbo | California buyers and higher-end Ohio purchases in places like Mason and Indian Hill | Jumbo pricing changes week to week. Sometimes the jumbo is the better deal |
| Buy before your old home sells | A short-term second covers part of the down payment, then gets paid off from your sale proceeds | Move-up buyers who need to close on the new home first | Carrying two homes and both payments until the sale closes |
The rules that shape a piggyback
Most piggybacks sit behind a conventional first mortgage sold to Fannie Mae or Freddie Mac, so their rules on second liens apply. The ones that matter to you:
- Both loans count toward your combined loan-to-value. A closed-end second counts at its balance. A HELOC counts at what you've drawn for one ratio and at its full credit line for the other, drawn or not. A big unused HELOC line can push you over a limit even if you never touch it.
- No negative amortization. The second's payment has to at least cover its interest.
- No short balloons. A second that doesn't fully amortize can't come due less than five years after the first mortgage closes.
- Everything is disclosed. The second mortgage and its terms are disclosed to the investor, the appraiser and any mortgage insurer. There's no hidden version of this.
- Both payments count in your debt ratio. A piggyback changes what the money costs. It doesn't raise how much you qualify for.
- The second usually has its own approval. Second-lien lenders often want stronger credit and more equity than the first. Requirements vary by lender, which is why it pays to shop the second through a broker.
Fixed second or HELOC second?
A fixed-rate second is the predictable choice. Your payment is set, it pays itself off over 10 to 30 years, and nothing changes when the Fed moves. A HELOC second usually starts cheaper, because the draw period is often interest-only. On the $33,000 example, interest-only at 8.5% is about $234 a month instead of $286. But the rate floats with prime, and the payment jumps when the draw period ends. If you plan to pay the second off within a year or two, from a bonus or a home sale, the HELOC's flexibility is worth it. If you're keeping it, I usually lean fixed.
The jumbo angle, mostly for California
In Ohio the median home is nowhere near the 2026 conforming limit of $832,750, so a piggyback here is mostly about PMI. In California it's often about the limit. Take a $1,000,000 purchase in Sacramento County, where the limit is the $832,750 baseline. With 10% down, one $900,000 loan is a jumbo, with jumbo underwriting and reserve requirements. Split it 80-10-10 and the first mortgage is $800,000, a conforming loan, with a $100,000 second behind it. In Los Angeles County, where the 2026 limit is $1,249,125, the same idea works at higher prices. Some weeks the jumbo prices better anyway. I price both versions and show you the difference.
- 1 Day 1
Both versions, side by side
Your price, down payment and credit. I price one loan with PMI and an 80-10-10, and show you the monthly payment and the cost over the years you'll actually keep the house.
- 2 Week 1
First and second placed
The first goes to the wholesale lender with the best conventional pricing. The second goes to the lender with the best second-lien terms. They don't have to be the same lender.
- 3 Under contract
One appraisal, two approvals
Both lenders rely on the same appraisal and title work. My closings average about 13 days from application.
- 4 Closing
Keys, and a payoff plan
If the plan is to pay off the second early, we set the target date now, so the loan you end up with is a single 80% loan that never carried PMI.
When I'll tell you not to use one
- Your PMI quote is low. Buyers with high credit scores often get PMI cheap enough that one loan beats the piggyback outright.
- You qualify for down payment help. Ohio's OHFA programs and the local assistance on my first-time home buyer page can cover the gap without a second rate to pay.
- You need FHA's credit flexibility. If your score is in the 600s, an FHA loan may be the better path than trying to qualify for two conventional liens.
- You're a veteran. A VA loan needs no down payment and has no monthly mortgage insurance, so there's nothing for a piggyback to fix.
Figures current as of October 2026. Programs, limits and rates change, and I re-verify everything at application.
Napkin math, upgraded
Price the first mortgage on its own
Set the down payment to 20% of the price to see the 80% first. Add the second's payment from the comparison above to get the full picture.
Illustrative estimates only — not a rate quote, an offer, or a commitment to lend. Your actual figures depend on your full scenario. More tools on the calculators page.
Real questions
Things people ask Zach about this
What is an 80-10-10 loan?
It's the classic piggyback: an 80% first mortgage, a 10% second mortgage and 10% down from you. Because the first mortgage never goes above 80% of the price, it doesn't require private mortgage insurance. An 80-15-5 version does the same thing with 5% down, at lenders that allow it. Both loans close together, and you make two payments each month.
Is a piggyback loan cheaper than paying PMI?
It depends on your PMI quote. On an illustrative $330,000 Cincinnati purchase with 10% down, the single loan runs about $1,877 a month before PMI, and the 80-10-10 runs about $1,955 for both loans. So the piggyback wins on the monthly payment only when PMI would cost more than about $78 a month. PMI is priced on your credit score and down payment, so that answer is different for every buyer. I get the real PMI quote and the real second-mortgage rate and put them side by side.
Is the second mortgage a HELOC or a fixed loan?
Either. A fixed-rate closed-end second gives you a set payment that pays itself off. A HELOC second usually has a variable rate and may be interest-only during the draw period, so the payment is lower up front but can move with the prime rate. Under Fannie Mae's rules the second can't have negative amortization, and a balloon can't come due less than five years after the first mortgage closes.
Can a piggyback help me avoid a jumbo loan?
Yes, and in California that's often the bigger reason to use one. The 2026 conforming limit is $832,750 in most counties. On a $1,000,000 purchase with 10% down, a single $900,000 loan is a jumbo. Split it 80-10-10 and the first mortgage is $800,000, which is conforming. Whether that's cheaper than the jumbo depends on that week's jumbo pricing, so I price both.
Do both payments count in my debt-to-income ratio?
Yes. The underwriter counts the first mortgage, the second mortgage, taxes, insurance and any HOA as your housing payment. A piggyback doesn't help you qualify for a bigger house. It changes what the money costs, not how much you can borrow.
Can I pay the second mortgage off early?
Usually, and that's the best way to use one. Pay the second down with a bonus, a tax refund or the proceeds from selling your old home, and you're left with a single 80% loan that never carried PMI. Check the second's terms for any prepayment penalty before you sign. I'll point it out if there is one.
Keep reading
Related lending
Conventional loans in Ohio — PMI, 3% down and the 2026 conforming limit →Jumbo loans in Ohio and California — when the loan is above $832,750 →HELOCs and second mortgages in Ohio — how the second lien works →First-time home buyer programs in Ohio — down payment help before you split the loan →Refinancing an Ohio home — rolling a second mortgage into one loan later →Ohio mortgage calculators — payment and affordability tools →Where Zach lends
Piggyback loans across Ohio & California
No pressure, no credit pull
Run your piggyback loan scenario by Zach.
Send the shape of it — what you’re buying, roughly what you earn, where you’re at. Zach reads every one personally and gets back to you the same day, nights and weekends included.
Nothing sensitive lives on this form: no Social Security number, no paperwork, and your credit isn’t touched until you say so. Equal Housing Opportunity. Zachary Bates, NMLS #2687902 · Coast2Coast Mortgage, NMLS #376205.