The question behind this guide
A buyer on r/AusPropertyChat reported a bank valuation $30,000 below the agreed price and asked whether a full inspection could produce a different result from a desktop assessment.
There are two separate questions: can the accepted valuation change, and can the buyer fund settlement if it does not? Work out the second while investigating the first.
Example: $800,000 price, $770,000 accepted value
Assume the lender caps this particular loan at 80% of the lower of price and valuation. Ignore buying costs for the initial comparison.
| Item | Value equals price | Value is $30,000 lower |
|---|---|---|
| Purchase price | $800,000 | $800,000 |
| Accepted security value | $800,000 | $770,000 |
| Loan at an assumed 80% ceiling | $640,000 | $616,000 |
| Buyer cash towards the price | $160,000 | $184,000 |
The extra cash is $24,000, which is 80% of the $30,000 valuation difference. It is not automatically the full $30,000.
The general calculation, where the same LVR ceiling applies, is:
Potential loan reduction = reduction in accepted value × permitted LVR.
An actual lender may cap the loan further because of servicing, property characteristics or product rules. If the lender maintains your requested loan instead, the effect is a higher assessed LVR, potentially different pricing or LMI, rather than this exact loan reduction.
What if I still want to borrow $640,000?
Against $770,000, a $640,000 facility is about 83.1% LVR. Ask whether that is acceptable for the borrower, property and product, and what insurance, pricing and cash requirements change.
Do not assume paying LMI makes a higher LVR available. Also check whether any financed premium counts towards the lender's maximum facility. For example, adding a $10,000 premium to a $640,000 base loan produces a $650,000 facility, about 84.4% of $770,000.
Add the costs outside the deposit
Continue the 80% example. If duty and other buying costs total an assumed $25,000 and you want to retain $10,000, the required savings are $184,000 + $25,000 + $10,000 = $219,000.
Before the lower valuation, the same assumptions required $195,000. Buying costs are illustrative; enter the actual state duty, legal costs, insurance and fees. A contract deposit already paid is part of your contribution, not an extra deposit to add again.
Can a full valuation change the answer?
Ask the lender or broker which assessment method was used and whether a review or different method is available. Relevant property details and comparable settled sales may assist a permitted review. A full inspection can produce the same, a higher or a lower result; it is not a promised solution to a funding gap.
APRA recognises several valuation methods depending on the situation. An agent's appraisal or an online estimate is not the same as the value a particular lender accepts.
If considering a different lender, confirm assessment and valuation timing, the revised approval and your contractual deadlines. Any extension, finance condition or renegotiation needs to be handled with the people managing the purchase contract. Do not assume another application changes settlement obligations.
Use the existing calculator correctly
In deposit and buying costs, enter the agreed price and the lower bank value. That shows the LVR of the requested loan; the valuation input does not automatically impose a lender's maximum.
Use the advanced approved-loan override to enter the revised facility, such as $616,000 in this example. Then include the actual buying costs and reserve to see your cash position. Check borrowing power separately; a valuation improvement does not create repayment capacity.
Review my purchase funding options
Sources and verification
- Borrower discussion: bank valuation below the agreed price. Evidence of the problem, not a prediction of review results.
- APRA APG 223: security valuation methods.
- ANZ Plus: how a lender determines property value.
Reviewed 31 October 2026. LVR limits, cost amounts and examples are assumptions; use the accepted valuation and confirmed facility for your transaction.
Make the next home loan decision with the numbers in front of you.
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