Refinance / Restructuring
Property Valuation In Refinancing
5 min read- Finance Guide
- Updated 2026
Quick answer
Refinance valuation often uses
Desktop or Full Valuation
To confirm security value and loan to value ratio
- Common methods AVM, desktop or full
- Main purpose Set LVR and usable equity
- Result risk May come in below expectation
1300 421 044
1300 421 044
Detailed explanation
Property valuation is one of the core moving parts in a refinance. Even where income and credit look strong, the refinance outcome can change quickly if the property value comes in below expectation, the security is considered unusual, or the lender decides a more conservative valuation method is required.
Core parts of refinance valuation
A refinance valuation usually involves:
-
Estimating current market value
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Checking the property against lender policy
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Selecting a valuation method
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Reviewing recent comparable sales
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Assessing location, condition and marketability
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Calculating LVR and usable equity
Major lenders explain that the valuation directly influences how much they are willing to lend, because it determines the lender's risk position and the resulting loan to value ratio.
Common valuation methods
Lenders may use different valuation approaches in a refinance:
Automated valuation model or AVM- Desktop valuation
- Kerbside or external only valuation
- Full internal inspection valuation
- As if complete valuation for unfinished works in some cases
- Panel valuer report ordered by the lender
- More conservative method for unusual or higher risk securities
Desktop and AVM methods can be faster and cheaper, but lenders may still require a full inspection where the property is unique, the loan is larger, the market is thinly traded, or the automated result is not strong enough
Why the valuation result matters
Many borrowers assume the bank will simply use the price they think the property is worth. In practice, lenders rely on their own valuation process. The valuation result affects maximum loan amount, LVR, access to equity, the need for LMI and sometimes whether the refinance is possible at all.
Valuation impact on equity If the refinance valuation comes in lower than expected, the lender may reduce the approved loan amount, decline the requested cash out, or require the borrower to stay below a lower LVR band.
What valuers and lenders typically look at
The valuation is not based on one single factor. Lenders and valuers usually focus on a mix of property, market and risk factors
Common assessment points include:
Recent comparable sales- Property type, land size and layout
- Condition, presentation and level of renovation
- Location, street appeal and surrounding marketability
- Rental appeal and resale strength where relevant
Lender valuation note
Major lenders note that bank valuations help determine how much they can lend. They are completed for mortgage purposes and may differ from an agent estimate, owner expectation or insurance replacement figure.
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Common valuation problems
Refinance valuations can become a problem when the property does not suit the lender's preferred security profile, the evidence is thin, or the borrower expects to extract more equity than the bank is prepared to recognise.
Valuation comes in lower than expected
A lower valuation can reduce borrowing capacity, limit equity release or trigger LMI when the borrower expected a straightforward refinance.
Possible solutions include:
- Reduce the requested LVR
- Provide extra funds to reduce the refinance amount
- Ask whether another valuation method is available
- Delay the refinance if market evidence is currently weak
Bank valuations are completed for lending risk purposes, so they may be more conservative than an owner or selling agent expects.
The lender will not accept the property on a simple valuation
Some properties are too specialised, too remote, too high density or too unusual for an automated or desktop valuation, leading to delays or policy restrictions.
Possible solutions include:
- Prepare updated property details and renovation evidence
- Expect a full inspection where the property is unusual
- Consider lenders with policy suited to the property type
- Reduce complexity by separating cash out from the core refinance if needed
The more unusual the security, the more likely the lender is to use a conservative approach.
Condition or presentation affects the result
Poor presentation, deferred maintenance or incomplete works can influence the valuation and make the refinance weaker than expected.
Possible solutions include:
- Complete practical repairs before valuation where possible
- Provide evidence of recent completed improvements
- Make the property accessible and presentable for inspection
- Use realistic comparable sales rather than aspirational estimates
Valuation is affected by what is physically there on the inspection date, not what the borrower plans to do later.
Steps to get Finance
Step
01
Check the likely value range of the property and the target refinance amount.
Step
02
Gather recent rates notices, plans or renovation details if relevant.
Step
03
Let the lender choose the valuation method under its policy.
Step
04
Review the valuation result against the intended LVR and cash out request.
Step
05
Adjust the structure if the valuation is lower than expected.
Step
06
Complete approval and settlement once value, LVR and policy align.
Speak with a refinance specialist about valuation and equity.
A refinance valuation can change the whole deal.
The right refinance structure depends partly on how the property is likely to be valued by the lender. A review can help identify whether the requested loan amount is realistic, whether a lower LVR would improve the options, and whether the security is likely to need a more conservative valuation method.
Speak with a refinance specialist about your property valuation scenario.
Submit the short form below and a refinance specialist can review your likely valuation position, LVR and refinance options.
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