I am currently about to lock in my jumbo mortgage but have one last decision to make and am looking for input. We are putting 10% down but the question is whether to do a 90/10 at 7.25% + PMI at roughly $300 per month or go with an 80/10/10 with the first at 7.25% and the second at 7 7/8ths. My hope would be to pay off the second in 10 years or less. We figure our home is appreciating 7-10% a year so we should be able to unload the PMI in 1-2 years based on a LTV of 80% after an appraisal. I am leaning toward the 80/10/10 since I will start off with payments that are somewhat less, the interest is deductable and once I pay off my second, my loan drops again. Am I thinking about this correctly?