Piggyback Mortgage Calculator

400,000 home with 10% down: 80% first mortgage (320,000 at 5%) + 10% second mortgage (40,000 at 7.5%) + 10% deposit. Combined payment 2,000/month avoids mortgage insurance required on single 90% LTV loans. Second loan upper rate but saves PMI.

A worked example

Try the defaults: property price of 400,000, deposit of 10%, first loan of 80%, first loan rate of 5%. The tool returns 1,997.51. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

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 before you sign

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. Running the numbers here before committing is the cheapest form of due diligence available.

What this doesn't capture

The figure excludes arrangement fees, valuation costs, legal fees, insurance, and any early-repayment charges — those can add several thousand to the headline cost. Rate changes at renewal for fixed-term deals will shift the picture further. Use this for the core interest/principal math and add the other costs on top.

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 calculates to approximately 2,180. A conventional single loan at 90% LTV (450,000 at 5.2%) would add mortgage insurance of around 180–220 per month, resulting in a comparable or higher total. The calculator models both scenarios side by side.

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; comparison with a single conventional loan.

Does not show: mortgage insurance premiums on the conventional alternative (enter them manually if needed); 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. Use this output to compare loan structures in principle, then verify all figures with a lender or mortgage broker before committing.