80-15-5 Loan Calculator
An 80-15-5 is a piggyback mortgage: an 80% first loan, a 15% second loan, and 5% down. The first lien stops at 80% of the price, so PMI never applies. See the combined payment below, and whether it beats a single 95% loan with mortgage insurance.
The 80-15-5 Piggyback
$400,000 first + $75,000 second + $25,000 down
30-year fixed, the cheapest LTV tier.
Second liens price 1–3%+ above a first mortgage.
The Alternative: 95% LTV Conventional Loan
Usually a notch above the 80% LTV rate — high-LTV loans price higher.
Typically 0.5%–1.5% of the loan per year; a 95% LTV lands at the high end.
How long you expect to hold the loan before selling or refinancing.
80-15-5 Monthly Payment (Both Liens)
$3,267
$2,528 first mortgage + $739 second mortgage. No PMI.
80-15-5 Piggyback
$400,000 at 6.5% + $75,000 at 8.5%
- First mortgage (P&I)
- $2,528
- Second mortgage (P&I)
- $739
- PMI
- $0
- Monthly total
- $3,267
95% LTV + PMI
$475,000 at 6.75%, one loan
- Mortgage (P&I)
- $3,081
- Second mortgage (P&I)
- —
- PMI at 0.9%/yr
- $356
- Monthly total
- $3,437
The 80-15-5 is $170 a month cheaper right now.
Both structures need the same $25,000 (5%) down, so the monthly gap comes down to one trade: a 8.5% second mortgage against $356 of PMI plus the higher rate on the full 95% balance.
Cost Over 7 Years
Net cost is everything you pay that doesn't become equity — interest plus PMI. It's the fair comparison, because the piggyback's bigger payment also pays down principal faster.
| 80-15-5 | 95% + PMI | |
|---|---|---|
| Total paid | $274,413 | $288,716 |
| Interest paid | $212,395 | $215,031 |
| PMI paid | $0 | $29,925 |
| Principal paid off | $62,018 | $43,760 |
| Balance remaining | $412,982 | $431,240 |
| Net cost (interest + PMI) | $212,395 | $244,956 |
Over 7 years the 80-15-5 costs $32,561 less.
PMI auto-cancels at 78% LTV
11 yr 7 mo
Requestable at 80% after 10 yr 7 mo
95% payment after PMI drops
$3,081
Principal & interest only
80-15-5 payment after year 15
$2,528
Second mortgage is paid off
How the Three Numbers Work
The name is the structure, read straight off the purchase price. On a $500,000 home:
- 80 — a $400,000 first mortgage, a standard 30-year fixed loan at the best rate tier lenders offer.
- 15 — a $75,000 second mortgage, usually a fixed-rate home equity loan closed at the same table, at a higher rate over a shorter term.
- 5 — $25,000 of your own cash, the down payment.
The first number is almost always 80, because 80% is the PMI threshold. Change the last two and you get the other piggybacks: an 80-10-10 puts 10% down with a 10% second, and an 80-5-15 flips that. All three are handled by the second mortgage calculator if your split differs from 80-15-5.
Why 80% Is the Line That Matters
Conventional lenders require private mortgage insurance whenever the first mortgageexceeds 80% of the home's value. PMI protects the lender, not you — it pays them if you default. The premium is folded into your monthly payment, typically 0.5% to 1.5% of the loan per year, with a 95% LTV loan landing near the top of that range because there's so little equity behind it.
An 80-15-5 sidesteps the requirement on a technicality that lenders themselves built: the test is applied to the first lien alone. Cap it at 80% and no insurance attaches, regardless of the fact that you owe 95% of the home's value across both loans. The second-mortgage lender absorbs that risk directly and charges you for it through a higher rate — which is really what you're comparing when you weigh a piggyback against PMI.
One asymmetry is easy to miss. PMI ends: you can request cancellation at 80% LTV and, under the Homeowners Protection Act, your lender must terminate it automatically at 78%. A second mortgage doesn't end — it amortizes until you pay it off. Work out what PMI would actually cost you, and for how long, with the PMI calculator.
What Rates Do to the Comparison
Three rates drive the answer, and they move independently:
- The spread on the second lien.This is the piggyback's main cost. Second mortgages run 1% to 3%+ above first-mortgage rates, and 95% combined LTV puts you in the worst pricing tier a second-lien lender offers. When that spread is wide, the piggyback's advantage evaporates.
- The LTV bump on the 95% loan.A single 95% LTV mortgage doesn't price at the same rate as an 80% one. Lenders add risk-based adjustments at high LTVs, so the alternative you're comparing against is itself more expensive than the 80% first mortgage in the piggyback.
- The PMI rate. Driven mostly by credit score and LTV. A borrower with a 760 score pays far less for PMI than one at 680, which can flip the answer entirely between two people buying the same house.
Because all three are quoted to you personally, don't take a rule of thumb from an article — including this one. Get a real quote for each structure, put the numbers in the calculator above, and set the horizon to how long you actually expect to keep the loan.
When an 80-15-5 Makes Sense — and When It Doesn't
It tends to win when:
- Your PMI quote is expensive. A middling credit score at 95% LTV can push PMI past 1% a year — often more than the extra interest on the second lien.
- You'll hold the loan a while before hitting 20% equity. The longer PMI would run, the more there is to avoid.
- Splitting keeps the first mortgage under the conforming limit. On a pricier home, an 80% first lien may stay conforming while a 95% one goes jumbo, and jumbo pricing can dwarf the second-mortgage spread.
- You want the interest deduction. Mortgage interest on debt used to buy the home may be deductible if you itemize, subject to IRS limits; PMI premiums are not currently deductible. Ask a tax professional about your situation.
It tends to lose when:
- The second-mortgage rate is steep. At 95% CLTV it often is. Run the numbers rather than assuming avoiding PMI is automatically cheaper.
- You'll reach 78% LTV soon.Rapid appreciation, extra principal payments, or a short holding period all shorten PMI's life and shrink what you're avoiding.
- You may refinance. Refinancing the first mortgage requires the second-lien holder to formally agree to stay subordinate. They can refuse, which means paying off the second loan to refinance at all.
- You want one payment.Two loans mean two servicers, two payoff dates, and two sets of closing costs. Some people pay for simplicity, and that's a legitimate choice.
Before either route, make sure the house itself fits — a piggyback lets you buy with 5% down but does nothing to lower the monthly obligation. Check the payment against your income with the affordability calculator, and budget for two loans' worth of fees with the closing costs calculator.
Related Reading
- PMI calculator — what mortgage insurance costs on the 95% loan, and when it cancels.
- Mortgage insurance explained — how PMI works, and how FHA's MIP differs.
- Second mortgage calculator — for splits other than 80-15-5, plus combined LTV and blended rate.
Frequently Asked Questions
What is an 80-15-5 mortgage?
An 80-15-5 mortgage splits a home purchase into three pieces: a first mortgage covering 80% of the price, a second mortgage covering 15%, and 5% cash down. It's called a piggyback because the second loan rides on top of the first, closing at the same time. The structure exists for one reason: conventional lenders require private mortgage insurance whenever the first mortgage exceeds 80% loan-to-value, so capping the first lien at exactly 80% means PMI never attaches — even though you only put 5% down.
How does an 80-15-5 loan avoid PMI?
PMI is priced off the first mortgage's loan-to-value ratio, not off your down payment or your combined debt. A lender looks at the first lien — 80% of the price — sees it is not above the 80% threshold, and requires no mortgage insurance. The 15% second mortgage is a separate loan with its own note and payment, and it does not count toward the first lien's LTV. Your combined loan-to-value is 95%, but no insurer is covering that gap; the second-mortgage lender is simply accepting the risk and charging a higher rate for it.
Is an 80-15-5 cheaper than paying PMI?
It depends on the spread between the second-mortgage rate and what PMI would cost, and on how long you hold the loan. The piggyback's advantage is largest when PMI would be expensive (a low credit score or a high 95% LTV pushes the PMI rate toward 1.5%) and when you'd carry that PMI for years. It shrinks or disappears when the second-mortgage rate is very high, or when you expect to reach 20% equity quickly — PMI cancels at 78% LTV automatically, while the second mortgage keeps accruing interest until you pay it off. The calculator above runs both structures over the horizon you actually plan to hold the loan.
Why is the second mortgage rate so much higher?
The second lien is paid only after the first is made whole in a foreclosure, so it carries more risk of loss and is priced accordingly — typically 1% to 3% or more above a comparable first mortgage, with the gap widening as combined LTV rises. At 95% CLTV the second-mortgage lender is standing behind a very thin equity cushion, which is why 80-15-5 pricing on the second lien is usually worse than the 80-10-10 equivalent. Strong credit is the main lever that brings it down.
Can I still get an 80-15-5 loan?
Piggybacks are far less common than they were before 2008, and lenders that offer them cap combined LTV tightly. Many will go to 90% CLTV (an 80-10-10) but stop short of the 95% CLTV an 80-15-5 requires, and the ones that do go to 95% usually want a high credit score and low debt-to-income. Credit unions and portfolio lenders are more likely to offer one than large national banks. If you can't find an 80-15-5, the realistic alternatives are an 80-10-10 with 10% down, or a single 95% loan with PMI you cancel later.
How do I pay off the second mortgage?
Most piggyback seconds are fixed-rate home equity loans with no prepayment penalty, so extra principal payments shorten the term directly. Because the second lien is small and expensive, a dollar of extra principal there usually erases more interest than the same dollar on the larger, cheaper first mortgage. Note that the second mortgage does not disappear on its own the way PMI does — nothing cancels it at 78% LTV. Paying it off is on you, and refinancing the first mortgage later requires the second-lien lender to agree to stay in second position.