You've signed a contract for $850,000. The lender's valuation comes back at $810,000. Suddenly your LVR is higher, your loan is smaller, and you're $40,000 short.
Low valuations are more common in a falling market, and Sydney and Melbourne values have been falling through 2026. Here's what to do.
Why the valuation matters
Lenders base your loan on the lower of the purchase price or the valuation. If the valuation is lower, the lender will lend less, or the same loan becomes a higher LVR.
Example: - Purchase price: $850,000 - Valuation: $810,000 - Planned loan at 80%: $680,000 - Lender will lend 80% of $810,000: $648,000 - Gap: $32,000 extra you need to find
Why valuations come in low
- Falling markets: valuers rely on recent sales, which may be lower than earlier sales
- Competition: you paid above what similar homes have sold for, especially at auction
- Limited comparables: unusual properties or small towns with few sales
- Desktop valuations: some valuations are done without an inspection and may miss improvements
- Off-the-plan: the market may have softened since you signed
Your options
1. Request a review
If the valuer missed recent comparable sales or key features (a renovation, extra bedroom, views), your broker can submit evidence and ask for a review. It doesn't always work, but it's worth trying when there's a genuine case.
2. Try another lender
Different lenders use different valuation firms. A broker can order a valuation through another lender, sometimes before you submit a full application.
3. Increase your deposit
If you have extra savings, family help or other funds, you can cover the gap.
4. Accept a higher LVR
If you were at 80%, borrowing more might push you above 80% and trigger LMI. Sometimes that's still the best option to secure the property.
5. Renegotiate the price
If you're still in the cooling-off period or have a finance clause, you may be able to negotiate with the vendor.
6. Walk away (if you can)
If you're within cooling-off or a finance clause, you may be able to withdraw. In NSW, withdrawing in cooling-off usually costs 0.25% of the price. After that, it's much harder.
How to reduce the risk
- Get pre-approval and talk to your broker before bidding
- Check recent sold prices, not just listings
- Ask about upfront valuations. Some lenders will value before you commit, especially before auction
- Keep extra savings as a contingency
Frequently asked questions
Can I see the valuation report?
Lenders don't always release it, but your broker can usually tell you the value and sometimes the comparables used.
Do I pay for another valuation?
Usually not, if a broker orders one through a different lender.
Is the bank's valuation the "real" value?
It's a conservative estimate for lending. It may differ from what a buyer would pay.
Facing a low valuation? Call Finfident on 0424 545 654. We'll check whether a review or another lender can close the gap.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.