A Standard Conventional Loan with 80% LTV or less is often considered the gold standard of home financing. It’s a conventional mortgage where the loan amount is 80% or less of the home’s value, which means no private mortgage insurance (PMI) is required.
This guide explains what it is, how it works, who it’s best for, and how it compares to other low-down-payment loans, so you can decide if it’s the right option for your purchase or refinance.
What Is a Standard Conventional Loan (80% LTV or Less)? LTV (Loan-to-Value) = loan amount ÷ home value 80% LTV or less = you put 20% down (or have 20% equity when refinancing) Because the lender’s risk is lower at this level, borrowers typically receive:
No PMI Better pricing Simpler long-term costs These loans follow Fannie Mae or Freddie Mac guidelines and are not government-insured.
Why 80% LTV Matters So Much Hitting 80% LTV is a major milestone in mortgage lending because:
PMI is not required Monthly payments are lower without insurance Long-term interest costs are often reduced The loan is easier to refinance later Many borrowers aim for 80% LTV specifically to avoid or eliminate PMI.
Purchase You put 20% or more down Loan amount is 80% or less of purchase price No PMI from day one Refinance You refinance once equity reaches 20% PMI (if any) may be removed New loan resets at 80% LTV or less Appraisal and underwriting requirements still apply.
Standard Conventional vs Low-Down-Payment Loans Standard Conventional vs Conventional 95 / 97 Feature
Standard Conventional
Conventional 95 / Conventional 97
Down payment 20%+ 3–5% PMI No Yes Monthly payment Lower Higher (due to PMI) Long-term cost Lower Higher Best for Strong savings Limited savings
Standard Conventional vs FHA Loan Feature
Standard Conventional
FHA loan
Down payment 20%+ 3.5% Mortgage insurance None MIP (often long-term) Credit flexibility Moderate More flexible Property types Primary, 2nd, investment Primary only
FHA may be easier upfront, but standard conventional is often cheaper long term.
Who Is a Standard Conventional Loan Best For? This loan is ideal if you:
Have 20% down or significant equity Want to avoid PMI entirely Have good to strong credit Prefer predictable long-term costs Are buying a primary home, second home, or investment property It’s commonly used by:
Move-up buyers High-income professionals Investors Homeowners refinancing to remove PMI Benefits of a Standard Conventional Loan Key Advantages No PMI Lower monthly payment Competitive interest rates Easier long-term budgeting Broad property eligibility Considerations Requires more cash upfront Opportunity cost of using savings Still subject to full underwriting Can You Remove PMI to Reach 80% LTV? Yes. Many homeowners:
Start with a low-down-payment loan Build equity through appreciation or payments Refinance or request PMI removal once eligible Requirements depend on loan age, equity, and investor rules.
Why Choose Loan Factory for a Standard Conventional Loan? When you’re putting 20% down or refinancing to remove PMI, pricing precision matters.
Explore Loan Factory reviews Zero application or junk fees Side-by-side comparison of 240+ wholesale lenders Transparent pricing with no hidden markups MOSO AI-powered platform for real-time rates and fast approvals Local loan advisors who analyze long-term cost—not just payment Trusted leadership from Thuan Nguyen , #1 Loan Officer in the U.S. We help you decide whether using 20% down is truly your best move—or if another strategy works better
Get Started with a Standard Conventional Loan Apply online: https://www.LoanFactory.com/apply
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For faster support, you can call or text us at (660) 333-3333.
This content is for informational purposes only and not a commitment to lend. Loan terms, rates, and approval depend on credit, underwriting, and investor guidelines.
FAQ: Standard Conventional (80% LTV or Less) 
