How the property valuation works when you refinance
The four types
Automated valuation: a model estimates value from sales data and property attributes without a valuer, used where the LVR is low and confidence is high. Desktop: a registered valuer reviews the data, photos and sales without visiting. Kerbside: the valuer drives past to confirm the property exists and its external condition. Full: the valuer inspects inside and out, measures and reports in detail. The lender picks the type by its policy on LVR, loan amount, property type and location; the borrower usually does not choose.
What the valuer looks at
Recent sales of comparable properties within a radius and time window, adjusted for differences. Land size, building size, condition, age, renovations, layout, parking and aspect. Zoning and any encumbrances. For units, the building and the strata. Valuers work to a defined standard and are liable for their figure, so they lean conservative, and a lender's refinance valuation is often below what an agent would quote as a sale price.
When it comes in low
Options: provide the valuer with evidence they may have missed, such as recent sales or renovation receipts, and ask the lender to request a review; apply to a different lender, whose valuer may use different comparables; reduce the loan to fit the valuation; or wait. Ordering a desktop opinion through a specialist before applying, which many lenders allow with no application, avoids the enquiry on your file if the number is not there.
Recent purchases and renovations
For a property bought within the last six to twelve months, the valuation usually equals the purchase price unless there is strong evidence of change. Renovations are counted at the value they add, which is less than they cost. A valuer will want to see completed work with receipts and, for structural changes, approvals.
Not sure which lender fits your situation?
Get help with refinancing situations
The refinances that get declined are the ones that fit a situation the lender does not like: a tax debt, a recent default, a separation, a high LVR. The right lender for that situation exists. We connect you with a finance specialist who knows which one.
Property Finance Help connects users with finance professionals who can help review the finance pathway for the property, loan purpose and lender policy fit.
Property Finance Help is a lead generation service, not a lender, broker, or financial adviser. All information on this website is general in nature and does not take into account your personal objectives, financial situation, or needs. Consider seeking independent professional advice before making any financial decision.
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