This study focuses on the possibility of modular multilevel converter (MMC) loss optimisation by modulation without any additional circuit, where a common-mode voltage is injected into a nearest level modulator. Owing to the common-mode voltage injection, the proposed modulation strategy increases the fundamental voltage. Therefore, for a given voltage, operation is possible with the submodule (SM) voltage of at least one SM inserted each arm. This reduces the number of SMs required, resulting in reduction of conduction losses and leading to significant cost savings and/or returns on investment for facilities. Furthermore, the injection of common-mode voltage also decreases the total SM transitions, resulting in reduction of switching losses. The proposed modulation strategy is valid under both normal and unbalanced ac fault conditions for MMCs. The common-mode voltage extraction method is provided and its harmonic components are extracted. Then, the SM saving capability of the injection-based nearest level modulation is discussed and the SM saving limit is presented in relation with modulation indexes. The optimisation of both conduction losses and switching losses is analysed. The effectiveness of the proposed modulation strategy under both normal and unbalanced ac fault condition is verified by simulations of a 101-level three-phase MMC in MATLAB/Simulink.