How to Avoid PMI With Only 10% Down Using The 80-10-10 Piggyback Method

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How to Avoid PMI With Only 10% Down Using The 80-10-10 Piggyback Method

Matt The Mortgage Guy 02.06.2026 85 просмотров 4 лайков

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The 80-10-10 mortgage structure is back in 2026 as a game-changer for California million-dollar home buyers. This video explains how the 80-10-10 loan setup offers buyers the advantage of putting just 10% down while avoiding private mortgage insurance (PMI) and jumbo loan status. Mortgage expert Matt Gouge breaks down the details: an $800,000 first mortgage (80%), a $100,000 second mortgage or HELOC (10%), and a $100,000 down payment (10%). This helps borrowers keep total debt under conforming loan limits and access lower mortgage rates. You’ll discover the crucial cost savings by avoiding PMI fees, which typically range from $300 to $800 monthly, and reducing upfront cash requirements. Matt also highlights the importance of planning how to pay off the second mortgage, whether through refinancing or leveraging investment/property gains. Understanding the rate gap—6% for first mortgage vs. up to 9.5% for second—is essential. Buyers should carefully evaluate their debt-to-income ratio and choose either a fixed-rate second mortgage or a HELOC based on individual needs. No one-size-fits-all exists in lending, so personalized advice is key. Connect with Matt Gouge’s team for tailored mortgage strategies. Key points covered include the 80-10-10 loan benefits, PMI avoidance, strategic planning for second mortgages, rate considerations, and the critical need for customized mortgage solutions. Perfect for high-end homebuyers aiming to optimize their financing in California’s 2026 market. 0:00 — Introduction 1:01 — What Is the 80-10-10 Method? 1:17 — How the Structure Works 3:06 — Side-by-Side Scenario 4:58 — When to Have an Exit Plan 5:44 — When the 80-10-10 Doesn't Work 7:07 — HELOC vs. Fixed Second 8:07 — Conclusion 🤝 CONNECT WITH ME Daily mortgage, real estate, and money talk 📸 Instagram: https://www.instagram.com/matt.themortgageguy 📘 Facebook: https://www.facebook.com/MattGougeMortgage 🎵 TikTok: https://www.tiktok.com/@mattthemortgageguy 📺 SUBSCRIBE FOR STRAIGHT-UP MORTGAGE & REAL ESTATE ADVICE No fluff. No hype. Just real talk. 🔔 YouTube: http://www.youtube.com/@MattTheMortgageGuy 🌐 WORK WITH ME / LEARN MORE 🏠 Website: https://mtmg.com/ 📧 Business inquiries: matt@mtmg.com 🔥 START HERE – MOST WATCHED & HELPFUL VIDEOS 💪 Matt The Mortgage Guy – Greatest Hits 🏠 Refinancing Your Mortgage is a HUGE Mistake https://youtu.be/bezKnZCRcjE 🔍 What Fed Cuts Actually Mean https://youtu.be/gWSQSB8WCNI 🏆 How to Win in a Buyers Market https://youtu.be/BoAgAcHUzgI 🏡 BUYING OR REFINANCING? START HERE ✅ Apply Now - https://mtmg.com/apply-online/ 📘 Buying a Home - https://mtmg.com/buy/ 🔄 Refinancing Options - https://mtmg.com/refinance/

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Introduction

If you're buying a million dollar plus home in California, your default assumption is probably you need 20% down to avoid PMI and that you're going to be in jumbo loan territory. There's a structure lets you put only 10% down, avoid PMI, and avoid jumbo entirely on a million dollar home. This is called the 80-10-10 piggyback. It's been around for a long time. This is nothing new to lending. It probably fell out of favor and didn't hear a lot about it, and it's back in 2026. A great option for a lot of borrowers. I'm Matt Gouge, Matt the Mortgage Guy. Been a mortgage broker for 12 plus years. I'm going to show you exactly how this works. If you want to connect me and my team, we're more than happy to help. We're licensed cross country. Go to mtmg. com. Book a call, poke around, do whatever you're going to do. Quick disclaimer before we start. This is educational only. Specific program availability varies by lender. This stuff changes. Verify your current options before making any decisions cuz who knows? You might see this video a year from now and things may have changed. But, here's the structure for now. First, let me explain

What Is the 80-10-10 Method?

to you what a 80-10-10 is cuz not everybody understands what that is. Instead of buying a million dollar home and needing to put 20% down, which is $200,000, let me tell you about the structure of the 80-10-10. You still have the same

How the Structure Works

$800,000 first mortgage. That's the 80% part. But, you're going to get a second mortgage or a home equity line of credit for 10% for $100,000. And then you're going to put $100,000 or 10% down. That's why it's an 80-10-10. The million dollar example is really easy to do the math on because it's a million dollar house, you put 10% down, there's that little 10% second, and then there's a $800,000 first mortgage. So, really, you have $900,000 in debt and you've got $100,000 in down payment. The big difference here is in most counties where the conforming loan limit is $832,000 and some change, you're not going to get a jumbo loan even though you're buying something with $900,000 in debt, which would be a jumbo in that county, did you not structure it this way. You're also not going to pay any mortgage insurance even though you're putting only 10% down. So, it for a number of reasons is a great option and people like this option. You're only putting $100,000 down instead of $200,000 down. And like I mentioned, the $800,000 first is a conforming conventional loan, great rates because it's under the 832750 conforming loan limit. So, you're getting the conforming rates, getting conforming underwriting, which is generally speaking going to be less strict than jumbo underwriting, and of course, you're avoiding private mortgage insurance. On loans this big, private mortgage insurance can be three, four, $500 a month. I've seen it up to $800 a month. It depends on your credit score, but you avoid that altogether. You don't pay anything. $0 and $0. 00 in mortgage insurance, and that's the whole game. Less cash, no PMI, conforming rates, conforming underwriting, piece of cake. So, as always, I know you guys like

Side-by-Side Scenario

scenarios, so I can give you a scenario. Let's use the same million-dollar loan. These used to be jumbo loans. $800,000 loans used to be jumbo. That's why I Part of me wants to do a bigger purchase amount, but let's pretend like it's jumbo. So, maybe it's a $1. 25 million purchase with 20% down, which is 250. You got a million-dollar loan, jumbo rates. So, maybe that jumbo rate is 6 and 1/2%. And I'm going to have to do some rough math and guess. Principal and interest might be $7,000 a month. I don't know. That's not as important, but the important part is that there's $250,000 plus closing costs to get this loan. Scenario B, when you do it the 80/10/10 way, you're going to only put 10% down. And the cool part about it is, I've done this a lot of times, you can structure it in a way where that home equity line of credit doesn't have to be exactly 10%. That might be 20%. The first might be 70% you're trying to keep it in that conforming loan limit. Some lenders offer 10% down jumbo. The rates are nasty and you don't want it. Usually your options are you do this 80/10/10 or some form of it, first loan, second loan, and down payment, or you just do a big down payment jumbo, which a lot of people just don't want to, even if they have the liquid cash, use all that liquid cash. So, some would say if you don't have the full 20% down, you can structure it this way. I'll tell you, I've talked to plenty of borrowers that have it, but they want to structure it this way because either they don't want to liquidate something they'd have to liquidate to put it down, or they just have 300,000 in cash and they're like, "We're going to use some of it for repairs, we're going to keep some of it in high-yield savings, we're going to put some of investments, we just don't want to put this much money into the home. " A couple pieces of advice that

When to Have an Exit Plan

I'll tell you before I forget to is make sure that you have a plan for paying off that second. Sometimes that plan is as simple as we're going to buy it for 125, we're going to have a first, second, we're going to put 10% down or whatever number down, in 3 years or 5 years when the house is worth 1. 5 million and we've paid down the loans a little bit, we're going to refinance and combine those loans. Or you're coming into some money, you're going to sell a investment property out of state, and when you get that money you're going to pay off this second loan, whatever the case may be, have a plan for paying off that second, cuz this isn't always the right move. There's times when this 80/10/10 just doesn't win. And I like to explain that as much as where it does work. Like those

When the 80-10-10 Doesn't Work

explain where it does work. Like those second mortgage rates are high. That lender who's in second position does so at a higher risk. You're putting less down on a bigger house. The first position mortgage has the first right if anything goes wrong in your life and you start to default. And so they're in a high-risk position and with that high risk they're going to charge you a high rate. 9 and 1/2% maybe 9%. That first loan might be 6 or 6 and 1/4 but the second's going to be high. The math can get ugly fast. With refinance, you have to realize that having two loans makes that a little bit more complex. So, if there's qualifying issues or there's going to be qualifying issues in the future where you wouldn't be able to refinance, proceed with caution. If you have a lot of down payment and you feel comfortable parking 200, 300, 400,000 dollars in home equity and doing it that way, then I'm not against just a straight 70, 75%, 80% loan-to-value jumbo loan. Do that. Also, like if you're at the upper end of debt-to-income, stacking a second mortgage payment on top of the first sometimes makes it so this doesn't work. The DTI considerations and guidelines on that second are going to be relatively strict. Like I said, they're at high risk that second lender and so be aware of that. And also, different lenders going to have different products. Some are going to be a fixed second, HELOC. Just make sure you understand

HELOC vs. Fixed Second

these two flavors and pick the best flavor for you. HELOC, a home equity line of credit, generally a variable rate. They might have an interest-only payment for the draw period and then it amortizes and the payment goes principal plus interest where during this drawdown you can pay it down and redraw during the draw period. The fixed second is just a closed-end loan. 15-year, 20-year, 30-year, fully amortized, fixed rate, 8. 75%, 9 and 1/4%, whatever it is from day one. Which one is right for you depends on your plan. If you want to pay off the second aggressively in the first 3 years using bonus money, stock sales, and investment property you're selling, the HELOC's flexibility is great. The fixed second is simpler. In the current 2026 rate environment, fixed seconds are sometimes priced more attractively than HELOC's, but it depends on the lender. Shop that. If you're trying to figure out whether an 80/10/10 makes sense for the home you're looking at, the price you're looking at, me and my team are more than happy to help. We can run scenarios side-by-side. Go to mtmge. com, connect

Conclusion

with me and my team. I'm doing a lot of these. other types of bank statement jumbo loans, and so look out for more videos. Subscribe so you can catch the future videos. Let me know if there's something you haven't seen that you'd like to see for me to analyze, because this is all I do. All day, every day. That's it. Thanks for watching. Bye-bye.

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