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- Best Price Guarantee – If Loan Factory can’t beat a competitor’s official offer, you receive $1,000 (Terms & Conditions apply)
- 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
Check mortgage rates: https://www.LoanFactory.com/quote
Talk to a loan advisor: (660) 333-3333
This is for informational purposes only and not a commitment to lend. Loan terms depend on credit, income, property type, appraisal, underwriting, and investor guidelines.
FAQ: Standard Conventional (80% LTV or Less)
