Piggyback Loan
Direct definition
A structure that pairs a first mortgage with a second lien to avoid PMI or jumbo pricing.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Common structures include 80/10/10 (80% first, 10% second, 10% down) or 80/15/5. The second lien is often a HELOC.
Why it matters
It can lower monthly cost and avoid mortgage insurance or jumbo tier — with the trade-off of managing two loans.
Where you may see it
- Loan Estimate
- Closing Disclosure
- Second mortgage documents
A real-world example
On a $600,000 purchase, an 80/10/10 splits into a $480,000 first and $60,000 HELOC with $60,000 down.
Educational and illustrative only
A common misunderstanding
A piggyback loan doesn't eliminate the cost of the extra borrowing — it trades mortgage insurance for a second loan payment, which isn't always cheaper.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026