Piggyback Mortgage Calculator

A 400,000 home with 10% down splits into an 80% first mortgage (320,000 at 5%), a 10% second mortgage (40,000 at 7.5%), and a 10% deposit, for a combined payment of about 2,000 a month. Splitting the borrowing this way can sidestep the mortgage insurance some lenders require on a single high loan-to-value mortgage. The second loan carries a higher rate, which offsets part of that saving.

A worked example

Take a 400,000 property at 10% down, an 80% first loan at 5%, and a 10% second loan at 7.5% over 30 years: the tool returns a combined 1,997.51 a month. You can adjust any input and the result updates as you type — no submit button, no reload. Seeing how sensitive the output is to one or two assumptions is the useful part.

What moves the number most

The result responds to Property Price, Deposit %, First Loan %, First Loan Rate, and Second Loan Rate. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

The formula behind this

Two amortisations combined. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Why this matters

A mortgage is usually the biggest single financial commitment a person makes. The difference between a well-chosen product and a hasty one can run into tens of thousands over the life of the loan. Modelling the numbers ahead of a decision shows how sensitive the outcome is to the rate and structure chosen.

What this doesn't capture

The figure shown reflects the core calculation; additional costs such as arrangement fees, valuation, legal fees, insurance, and any early-repayment charges (where applicable) sit on top and can add materially to the total cost of borrowing. Rates and product terms can also change over the life of the loan, which can shift the picture relative to this fixed-snapshot estimate.

Typical scenarios for piggyback mortgages

• Buyers with 10–20% deposit who want to avoid a single high-ratio loan with insurance costs
• Properties where the deposit sits just below a conventional mortgage insurance threshold
• Cases where two separate loans at different rates cost less in total than one conventional loan plus insurance
• Refinance situations where the first lien can be held at a lower rate and the second at a higher one

Realistic worked example with numbers

A property priced at 500,000 with a 15% deposit (75,000) leaves 425,000 to finance. A piggyback structure uses 80% (400,000) at 4.8% for the first loan and 5% (25,000) at 6.5% for the second. Over 25 years, the combined monthly payment works out to about 2,460. The appeal of splitting the loan is that, in markets where high loan-to-value mortgage insurance applies, it can avoid that premium — though the second loan's higher rate offsets part of the saving, so the totals can end up close.

What the result shows and does not show

Shows: the combined monthly principal and interest payment across both loans; how the second loan rate affects total outgoings; sensitivity to deposit size and property price.

Does not show: mortgage insurance premiums; the impact of tax relief on interest (if available in your jurisdiction); early repayment penalties; the risk that second-lien rates may rise at renewal while first-lien rates stay fixed; lender availability or approval odds; the legal or administrative complexity of managing two separate loans.

Educational illustration

This calculator is designed for illustrative purposes. Results estimate monthly payments based on the inputs you enter. Actual costs depend on your lender's terms, current market rates, your credit profile, and the property location. This output compares loan structures in principle; the figures can be checked against a lender or broker quote.