Piggyback HELOC: 80-10-10 explained

Buy with 10% down, keep the first mortgage at 80% and skip mortgage insurance. Here's how the two loans fit together, and when one loan with PMI is the better deal.

Reviewed by Shawn Way, NMLS #1007298★ 4.9 from 111 reviewsUpdated October 28, 2026

How it works

You apply once for the purchase. The lender approves two loans that close together:

• First mortgage, 80% of the price. Usually a fixed rate. At 80% loan-to-value there's no mortgage insurance.
• HELOC, 10% of the price. Drawn in full at closing to cover the rest of the purchase. It's a variable-rate line with an interest-only draw period, and as you pay it down you can draw again later.
• Your down payment, 10%. Plus closing costs.

Some lenders allow 80-15-5 (5% down), but fewer offer it and the HELOC pricing is usually higher.

Example: a $1,000,000 home

The HELOC in this example costs about $646 a month in interest at 7.75% APR while it's interest-only. Mortgage insurance on a $900,000 loan typically runs 0.3% to 0.9% a year depending on credit, or about $225 to $675 a month. The bigger difference is often the loan limit: in most of the country, $900,000 is above the 2026 baseline conforming limit of $832,750, so the one-loan option becomes a jumbo loan with stricter rules. The 80-10-10 keeps the first mortgage conforming.

In high-cost counties the limit is higher (up to $1,249,125 in Orange and Los Angeles counties), so the same split works on homes up to about $1.56 million: 80% of $1,561,000 is just under the limit.

Why buyers choose it

• No mortgage insurance from day one, without waiting to reach 20% equity.
• Stay under the conforming limit and avoid jumbo pricing and reserve requirements.
• Pay the second loan off on your schedule. Many buyers clear the HELOC with a bonus, a tax refund or the proceeds from selling their old home, then keep the line open.
• Keep cash. Buyers who could put 20% down sometimes use a piggyback to keep savings for repairs or reserves.

The trade-offs

• The HELOC rate is variable. If rates rise, so does that payment. Some lenders let you lock all or part of the balance at a fixed rate.
• Two payments, two loans. The lender qualifies you on both, so debt-to-income ratios are tighter.
• Less equity at the start. At 90% combined loan-to-value, a dip in prices leaves less cushion if you need to sell early.
• Mortgage insurance isn't forever. On a single conventional loan, PMI can be removed once you reach 20% equity. If you'd get there quickly, one loan with PMI can cost less overall. Compare both.

Qualifying

Lenders typically look for a credit score of 680 to 720 or higher for the HELOC, stable income that covers both payments, and reserves. The purchase appraisal values the home for both loans. Primary homes are easiest; second homes are possible with some lenders; investment properties rarely qualify for a piggyback HELOC.

Also asked

Is a piggyback HELOC the same as an 80-10-10 loan?

Yes. 80-10-10 describes the split: 80% first mortgage, 10% second, 10% down. The second can be a HELOC or a fixed home equity loan.

Can I pay off the piggyback HELOC early?

Usually yes, with no prepayment penalty, though some lenders charge an early-closure fee if you close the line within the first few years. Paying it down and keeping it open avoids that fee.

Does a piggyback HELOC need its own appraisal?

No, a piggyback HELOC doesn't need its own appraisal. The purchase appraisal values the home for both the first mortgage and the HELOC, since the two loans close together.

Can you refinance the first mortgage later and keep a piggyback HELOC?

Yes, you can refinance the first mortgage later and keep a piggyback HELOC, as long as the HELOC lender agrees to stay in second position behind the new loan. See refinancing and keeping a HELOC.

More in HELOC guides

• Using a HELOC to buy a rental
• HELOC for a down payment
• HELOC to fund a business
• HELOC for college costs
• HELOC as an emergency fund
• Should you use a HELOC to buy a car?
• Should you use a HELOC to pay for a wedding?
• Should you use a HELOC to invest in stocks?

All HELOC guides →