What can you do about a low refinance valuation?
If a refinance valuation is lower than expected, first ask what value the lender has adopted and how it changes the proposed loan. Recalculate the loan-to-value ratio using the actual borrowing amount. Then check the property details, ask whether a review is available and compare the revised costs. An online estimate or agent appraisal can provide context, but it does not establish the value a lender will accept.
By Ratey · General information for Australian borrowers.
Example: an expected 80% LVR becomes 85.7%
Assume a proposed refinance of $600,000 and an expected property value of $750,000. The starting estimate is 80% LVR. If the lender adopts $700,000 instead, the same borrowing produces about 85.7% LVR.
To reach an illustrative 80% ratio at that valuation, the loan would need to be $560,000: $40,000 less than proposed, before any additional financed costs. That arithmetic does not mean paying in $40,000 is the right choice or that 80% guarantees approval. The next step is to obtain the revised offer and compare it with keeping that cash available.
Find the actual consequence before reacting
A lower valuation increases LVR when the loan amount stays the same. It may affect the product, pricing, required contribution or possible LMI. Ask the lender to identify the specific consequence for your application rather than assuming the refinance has failed.
ANZ’s valuation explanation describes how the lender’s value is used to assess the property as security and calculate LVR. Treat that principle separately from your personal view of the selling price. The refinance decision needs the value accepted for this application.
Check which loan amount the lender used. Extra borrowing or financed costs can increase the numerator as well as the valuation changing the denominator. For multiple properties or loan splits, ask for the complete security and debt calculation.
Check facts before debating the number
Confirm the property address, dwelling type and relevant physical details the lender can share. If there is a factual omission, explain it clearly and provide evidence. A completed extension, an incorrect land area or an incorrectly recorded property type is a more specific enquiry than saying the figure feels low.
Ask what review process, if any, is available and what supporting information it accepts. There is no promise that the lender will disclose a full report, order another valuation or change the result. Obtain instructions before paying for your own valuation; it may not be acceptable for lending purposes.
- Which value has been adopted, and on what date?
- What loan amount and security have been used for LVR?
- Can any recorded property details be checked?
- Is a review available, and what evidence would help?
- Would a review carry a fee or change the timeline?
Compare practical responses
Write down the revised offer first. Then compare the cost of proceeding, reducing the proposed borrowing, contributing available cash, asking the current lender for a rate review, or waiting. Each option solves a different part of the problem and can affect household liquidity.
If considering another lender, ask about the assessment process before starting a fresh application. Another valuation is not guaranteed to be higher, and a different value does not establish income eligibility. Avoid basing a plan on an unconfirmed estimate from a second source.
| Possible response | What to check |
|---|---|
| Proceed at the revised LVR | Actual pricing, fees and any LMI quote |
| Reduce borrowing | Whether the refinance still meets its purpose |
| Contribute cash | Remaining emergency funds and settlement needs |
| Request a review | Accepted evidence, cost and likely timing |
| Stay or revisit later | Current-lender pricing and what would prompt another review |
Rerun the refinance once the offer changes
Replace the old proposed rate and fees with the revised written figures. If the refinance now requires LMI or additional cash, keep that visible in the decision. Use the same holding period so you can compare the revised result with the original scenario.
A cash contribution also changes the comparison: reducing debt with savings is an action you might be able to take on the current loan too. Compare equivalent starting positions where possible, and account for the cash retained or used. Otherwise, the benefit of paying down principal can be mistaken for a benefit created by switching lenders.
The general equity threshold guide covers whether equity may support a refinance. This page focuses on what to do after the lender’s valuation changes the application.
Your next-step checklist
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Common questions
Can I insist the lender uses an agent appraisal?
Ask what evidence it accepts. An appraisal can inform your enquiry, but the lender decides the valuation it will rely on for its credit decision.
Will a lower valuation always stop the refinance?
No. The consequence depends on the proposed loan and lender requirements. Ask for the revised terms or the specific condition preventing the application from progressing.
Will another bank value the property higher?
It might use a different assessment, but a higher result is not assured. Ask about the process and costs before relying on that possibility.
Sources and assumptions
These primary sources support the explanations above. Examples use invented figures to show the calculation or decision; they are not available loan offers. Check your lender’s terms for your circumstances.
Calculations are estimates and do not establish borrowing eligibility. Read the calculation methodology.
Check the revised refinance
Use the lender’s updated rate and cost figures to see whether switching still fits your plans.