An 80/10/10 piggyback loan splits your financing into two mortgages so you can put 10% down without paying private mortgage insurance. The first loan covers 80% of the price, a second loan covers the next 10%, and you bring the last 10%. In the Valley right now it does two jobs: it can beat PMI for buyers with strong credit, and it can keep a Scottsdale purchase under the conforming loan limit so you never touch a jumbo. It is also more paperwork and one more payment, and it does not win every time. Here is the 2026 math.

How an 80/10/10 Piggyback Works

You close two loans on the same day. The first mortgage is a normal conventional loan at 80% of value. The second sits behind it, either as a home equity line of credit or a fixed rate second mortgage, and covers 10% of the price.

Because the first loan never goes above 80% loan to value, it carries no PMI. The second loan has its own rate, usually 1 to 2 points above the first, and its own payment. Both get underwritten together, and your debt to income ratio counts both payments. The appraisal, title, and escrow happen once. The second lien adds its own small set of fees, often a few hundred dollars to a couple thousand depending on the lender.

The structure flexes. A 75/15/10 or an 80/15/5 works the same way, and on a high priced home the split is often set by the conforming limit rather than a round number. The CFPB's explainer on home equity lines of credit covers how the second lien itself works.

80/10/10 vs One Loan With PMI

On a $650,000 home with 10% down, our example 80/10/10 costs about $152 a month less at the start than one loan with PMI. Here is the side by side.

The first loan rate is Bankrate's November 4, 2026 national average of 7.26% on a 30 year fixed. The second loan rates are estimates; real second lien pricing moves with your score and the lender. PMI is estimated at 0.45% of the loan a year, which is roughly where a 740 score with 10% down lands. Every row adds about $276 a month of property tax at Arizona's 0.51% average effective rate and $183 of homeowners insurance. Our breakdown of what PMI costs in Arizona shows how much that column swings by credit score.

The piggyback wins on day one. The real question is whether it still wins in year nine, when PMI would have come off on its own.

The Catch: PMI Ends and the Second Loan Does Not

PMI is temporary. The second loan stays until you pay it off or refinance it. That one difference decides most of these comparisons.

On the one loan option above, the balance reaches 80% of the original price around month 104, almost nine years in, at which point you can ask the servicer to drop PMI. It must fall off automatically at 78%, around month 118. The CFPB explains the federal PMI removal rules. With Valley appreciation you can often get there sooner with a new appraisal, though Phoenix prices have been flat to slightly down this year, so do not plan on that.

The second loan, meanwhile, keeps charging a higher rate on its balance for as long as you carry it. If you plan to throw a bonus or a home sale at the second within a few years, the piggyback is usually the cheaper path. If you would just make the minimum payment for a decade, the gap narrows, and with a 760 score and cheap PMI, one loan can come out ahead. I run both versions for every buyer who asks, because the answer changes with the credit score more than anything else.

Using a Piggyback to Stay Under the Jumbo Limit

The second job is dodging a jumbo loan. The 2026 conforming loan limit in Maricopa County is $832,750 for a one unit home, per the FHFA conforming loan limit table. Every dollar of first mortgage above that is jumbo.

Take a $1,100,000 home, right at the October median for buying in Scottsdale. With 10% down, one loan would be $990,000, a jumbo. Split it as a $832,750 conforming first and a $157,250 second, and the first loan follows conforming guidelines: lighter reserve rules, more lenders competing, and no jumbo underwriting on the whole balance.

Be honest about the payment, though. Bankrate had the 30 year jumbo at 7.36% on November 4, only a tenth of a point over conforming. In our example the piggyback still comes out about $316 a month cheaper than a 90% jumbo with mortgage insurance, but that edge comes mostly from skipping the insurance, not the rate. More often the reason to do it is qualifying: plenty of jumbo lenders stop at 80% or 85% loan to value or want twelve months of reserves, and the conforming first may not. Our post on 2026 conventional loan limits in Arizona has the county numbers, and our Arizona jumbo loans page covers the other side.

Run Your Own Numbers

Who Qualifies for a Piggyback in 2026

The second lien is the hard part. Most second lien lenders want a 680 to 700 score at minimum, with better pricing from about 720 to 740. Total debt to income usually needs to stay at or under about 43% to 45% with both payments counted.

The second lender also cares about combined loan to value, which is 90% on an 80/10/10. Fewer lenders go to 95% combined, and they price it accordingly. Condos can be tougher, and some second lien lenders will not touch a non warrantable project at all. Expect to show two months of bank statements, a full income file, and reserves on top of your down payment and closing costs.

Not every lender offers a piggyback either. Plenty of retail banks will only do one or the other, and that is where a broker helps. We can pair a first mortgage from one lender with a second from another. You can see the loan programs we shop and how a file moves from preapproval to closing on our process page.

Why This Matters in the Valley Right Now

Metro Phoenix is a buyer's market, and that changes how you should think about your down payment. AZ Big Media reported an October median sale price of $448,000, down 1.5%, active listings up 6.8% from a year earlier, and the Cromford Market Index at 70.1. Anything under 100 favors buyers.

In a market like that, keeping cash in the bank has real value. A buyer who puts 10% down instead of 20% on a $650,000 home in Phoenix keeps $65,000 liquid for furniture, a summer of electric bills, or a seller who will not fix the roof. Homes.com's Phoenix housing market report tracks the same softening on price and time on market, which also means more room to ask a seller to pay for a rate buydown on the first loan. You can browse what is listed right now at Arizona Luxury Property Search, and our breakdown of the mortgage on a $500K house in Arizona shows the payment math at the median.

If you want to compare a HELOC second with a fixed second, our guide to HELOC vs home equity loan in Arizona walks through the tradeoffs. Or talk to us directly at Pillar Mortgage Group.

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