What happens if the bank valuation is lower than the purchase price?

The bank lends against the lower of the price and the valuation, so you'll need to cover the difference with a bigger deposit, challenge the valuation, or try another lender.

Can I challenge a bank valuation?

Yes. Your broker or bank can ask the valuer to review it, generally with recent comparable sales that support the price you paid.

Will a different bank value the property higher?

It might. Different lenders use different valuers, so a second valuation can come back closer to the contract price. It's not guaranteed, but it's often worth trying.

Can I pull out of a contract if the valuation is low?

It depends on your contract. In NSW you can withdraw during the five business day cooling-off period and forfeit 0.25% of the price. Outside that, it depends on whether the contract is subject to finance, so talk to your conveyancer.

How much extra deposit do I need if the valuation is low?

The bank lends its usual percentage of the lower valuation, so the extra you need is the difference between that and what you'd planned. On a $600k price valued at $570k at 80%, the gap is about $24k.

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Straight Answers · Bank said no

The bank valued it lower than what I paid. What happens?

Bayley Clarke · Mortgage broker on the road · Last checked 16 October 2026 · 3 min read

The short answer

With the market where it's at, we're starting to see more valuations come in under the contract price. The order I work through is: challenge it, then try another lender, then either put in more money or look at getting out of the contract.

It matters because the bank lends against the lower of what you paid and what it thinks the place is worth. A short valuation doesn't change the price you owe the seller. It changes how much of it the bank will cover.

The 60 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.

Why a low valuation costs you money

Say you've agreed to pay $600k and you're borrowing 80%, so you're expecting a $480k loan. The bank's valuer comes back at $570k. The bank now lends 80% of $570k, which is $456k. The seller still wants $600k.

So for you that means a $24k gap you weren't planning for, on top of the deposit and costs you'd already saved. If you were borrowing above 80%, a low valuation can also push you into a higher mortgage insurance bracket or over a lender's limit. That's why it's worth fighting before you start finding money.

Step one: challenge it

The first move is to challenge the valuation with the valuer, through your broker or through your bank. That generally means putting up recent comparable sales that support the price you paid, and pointing out anything the valuer may have missed, like a renovation or a feature that sets the place apart.

It doesn't always work, but it costs you nothing to try and it's the quickest fix if it does.

Step two and three: another lender, then your options

If the challenge doesn't move it, try another lender. Different banks use different valuers and panels, and a second valuation can come back closer to what you paid. This is a big part of why having a broker matters here: I can get another lender's valuation in motion without you starting from scratch.

If that still doesn't work, you're left with two choices. Cough up more money to cover the gap, or, if you don't want to proceed and your contract allows it, look at getting out. In NSW, if you're still inside the five business day cooling-off period, you can walk away and forfeit 0.25% of the price. Outside that, it depends on your contract and whether it's subject to finance, which is a conversation for your conveyancer.

The honest bit: sometimes the valuer is telling you something

A valuation isn't always wrong. In a softening market, the price you agreed to may simply be ahead of where similar places are selling now. Before you throw more money at it, it's worth asking whether you still want the property at that price.

Generally, though, challenge it first, then go to a different bank, and that will more than likely solve the problem. Topping up or backing out comes after those.

Valuation come in short?

A 30 minute call. We look at the gap, the comparable sales and your contract, and work out whether to challenge, go to another lender or plan for the top-up.

Book a 30 minute call Call 0437 189 939

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