Deep generative models offer a powerful alternative to conventional channel estimation by learning the complex prior distribution of wireless channels. Capitalizing on this potential, this paper proposes a novel channel estimation algorithm based on latent diffusion models (LDMs), termed posterior sampling with latent diffusion for channel estimation (PSLD-CE). The core of our approach is a lightweight LDM architecture specifically designed for channel estimation, which serves as a powerful generative prior to capture the intricate channel distribution. Furthermore, we enhance the diffusion posterior sampling process by introducing an effective approximation for the likelihood term and a tailored self-consistency constraint on the variational autoencoder latent space. Extensive experimental results demonstrate that PSLD-CE consistently outperforms a wide range of existing methods. Notably, these significant performance gains are achieved while maintaining low computational complexity and fast inference speed, establishing our method as a highly promising and practical solution for next-generation wireless systems.