Buying · 7 min read
Piggyback (80-10-10) Loans in California: Skip PMI and Jumbo (2026)
QUICK ANSWER
An 80-10-10 piggyback splits your financing into a first mortgage for 80%, a second loan (HELOC or fixed) for 10%, and 10% down. It lets you avoid PMI, or keep the first mortgage under the conforming limit to dodge jumbo pricing — both common wins in high-cost California.
In a state where a “normal” home can push past the conforming loan limit, a piggyback loan is a quietly powerful tool. By splitting your financing into two loans, an 80-10-10 can eliminate PMI or keep you out of pricier jumbo territory — sometimes both. Here’s how it works in California in 2026.
How the 80-10-10 splits work
The numbers name the structure: an 80% first mortgage, a 10% second mortgage, and 10% down. Variations exist — 80-15-5 (5% down) or 75-15-10 — but the idea is the same: a first loan plus a smaller second loan that “piggybacks” on it.
The second loan is usually a HELOC or a fixed second. It sits behind the first in lien position, which is why it carries a somewhat higher rate.
Reason 1: avoid PMI with under 20% down
Put 10% down normally and you’ll pay private mortgage insurance until you reach 20% equity. The piggyback avoids PMI entirely by keeping the first mortgage at 80% loan-to-value — the second loan covers the gap. On a California-sized loan, skipping PMI can save a few hundred dollars a month.
Reason 2: stay under the jumbo threshold
This is the California-specific win. If a single loan would exceed your county’s conforming limit, it becomes a jumbo with stricter guidelines and often a higher rate. An 80-10-10 can keep the first mortgage at or below the conforming line — preserving conforming pricing — while the second loan covers the rest. See our 2026 conforming limits.
When it makes sense — and when it doesn’t
Piggybacks shine when PMI is expensive, when you’re just over the jumbo line, or when you want to keep cash invested. The trade-offs: two payments, a variable-rate second if it’s a HELOC, and slightly more complex underwriting. A broker can compare an 80-10-10 against a single loan with PMI — and against a jumbo — so you see the true monthly cost of each.
Frequently asked questions
What is an 80-10-10 loan?
It’s a piggyback structure: an 80% first mortgage, a 10% second mortgage, and 10% down. It’s used to avoid PMI or to keep the first loan under the conforming (non-jumbo) limit.
Does a piggyback loan really avoid PMI?
Yes. Because the first mortgage stays at 80% loan-to-value, no private mortgage insurance is required — the second loan covers the amount between your down payment and 20%.
Can a piggyback help me avoid a jumbo loan in California?
Yes, and it’s a common California strategy. Keeping the first mortgage at or below your county’s conforming limit preserves conforming pricing, while the second loan covers the excess.
What are the downsides of an 80-10-10?
You’ll have two payments, the second loan carries a higher rate (and may be variable if it’s a HELOC), and underwriting is a bit more involved. We’ll compare it to the alternatives so you choose the cheapest overall.
Related reading
Found this useful? Pass it on.
If this helped you make sense of your options, send it to someone who needs it — a friend buying their first place, a family member weighing a refinance, a colleague comparing lenders.
Tip: highlight any sentence in the article to share it as a quote.