Property Valuation Fees — Bank vs Independent Valuations (2026)
When you apply for a home loan, your lender needs to confirm the property is worth at least the agreed purchase price before approving your loan. This requires a formal property valuation. The type of valuation, who orders it and whether you pay for it varies by lender, loan size and property type.
Why Do Lenders Require a Valuation?
The lender takes a mortgage over the property as security for the loan. Before lending, they need to know:
- Is the property worth the purchase price?
- If you default, can they recover the loan by selling the property?
If the valuation comes in below the purchase price, the lender will lend based on the lower valuation value — meaning you need a larger deposit to cover the gap.
Types of Property Valuation
1. Full Valuation (In-Person)
A licensed valuer physically inspects the property inside and out, reviews comparable sales data and produces a formal written report.
- Most accurate
- Required for high-value properties ($1m+), non-standard properties, complex cases
- Typically $300–$600 for standard residential; $600–$1,200+ for prestige or commercial
2. Kerbside Valuation
The valuer drives past the property and inspects from the street (no internal inspection). Used for lower-risk applications where the property is standard and well-located.
- Less accurate than a full valuation
- Faster and cheaper
- Often used for refinancing of existing properties with known condition
3. Desktop Valuation
An automated or analyst-based valuation using comparable sales data without physical inspection. Also called an Automated Valuation Model (AVM).
- Fastest (minutes to hours)
- Cheapest (often $0 — absorbed by lender or automated)
- Lowest accuracy — suitable only for straightforward properties with good comparable data
- More common for low-LVR refinances
Who Pays the Valuation Fee?
| Scenario | Who Typically Pays |
|---|---|
| Purchase loan (standard residential) | Often absorbed by the lender at no cost to borrower |
| Refinance | Often absorbed or waived |
| High-value or complex properties | Borrower may be charged ($300–$600) |
| Second or subsequent valuations | Borrower (if first valuation came in low and borrower requests review) |
| Independent valuation ordered by borrower | Borrower always pays |
Many lenders waive the valuation fee on standard purchase applications as part of competitive offerings. Always ask whether the valuation fee applies before submitting an application.
Typical Valuation Fees (2026)
| Property Type / Scenario | Estimated Fee |
|---|---|
| Standard residential (bank absorbs) | $0 |
| Standard residential (passed to borrower) | $250–$400 |
| Units and apartments | $200–$350 |
| Prestige / high-value ($1m+) | $500–$900 |
| Rural or hobby farms | $600–$1,500+ |
| Commercial property | $1,500–$10,000+ |
| Independent valuation (buyer-ordered) | $400–$800 |
Bank Valuation vs Independent Valuation
| Bank (Lender-Ordered) | Independent (Borrower-Ordered) | |
|---|---|---|
| Purpose | Lender’s security and lending decision | Buyer’s own knowledge; legal disputes; family law |
| Accepted by lender? | Yes — used for loan approval | No — lenders do not use independent valuations for loan decisions |
| Cost | $0–$500 (sometimes absorbed) | $400–$800 |
| Who the valuer works for | Lender (valuer panel) | You (as the client) |
| Useful for | Loan approval | Pre-purchase assessment, dispute resolution |
Important: If you order an independent valuation, the bank will not accept it for their loan decision. They will order their own valuation regardless.
What If the Valuation Comes In Below the Purchase Price?
A “short valuation” (where the bank’s valuation is below the contract price) is a significant problem:
What happens:
- The lender calculates LVR based on the lower valuation value — not the purchase price
- If your deposit was based on the purchase price, your effective LVR increases
- You may now need LMI (if LVR crosses 80%) or a larger deposit to proceed
Options:
- Increase your deposit — cover the gap between valuation and purchase price
- Negotiate the purchase price down to the valuation value (more difficult in a competitive market)
- Challenge the valuation — request the lender review the valuation; provide comparable sales data. Not always successful, but worth attempting.
- Try another lender — different lenders use different valuer panels; another valuer may assess higher
- Exit the contract — if a finance condition applies, a low valuation may allow you to exercise the finance condition and exit without penalty
How Valuations Work at Auction
At auction in most states (particularly NSW and VIC), there is no cooling-off period. You buy unconditionally — which means you typically cannot exit due to a low valuation.
Best practice for auction buyers:
- Arrange pre-approval from your lender with a desktop or kerbside valuation before bidding
- Be aware that lenders may still require a full valuation post-auction, and if it comes in low, you must still complete
- Budget conservatively on your maximum bid to account for valuation risk
Lender Valuation Panel — Why It Matters
Lenders use an approved panel of valuers. Different lenders have different panels — and different valuers may assess a property at different values. This explains why the same property can be valued differently by different lenders.
If you receive a low valuation from Lender A, applying to Lender B (using a different valuer panel) may produce a higher valuation.
Frequently Asked Questions
Is the bank valuation the market value of my property? The bank valuation is a formal assessment of market value by a registered valuer, based on comparable sales. It should be close to market value, but may differ. Banks are conservative — they may be slightly lower than auction outcomes in strong markets.
Can I dispute a low valuation? Yes — you can ask your lender to request the valuer review the assessment, and you can provide comparable sales data. Success rates are variable.
Do I get a copy of the bank’s valuation? Lenders are required to provide the valuation to borrowers on request. Some lenders provide it automatically.
Related Guides
- Hidden Costs of Buying a Home
- LMI Explained
- Home Loan Costs and Fees
- How Much Can I Borrow?
- Costs and Fees Hub
This article provides general information about property valuation fees and processes. Fees vary by lender, property type and location. For advice tailored to your situation, speak with a licensed mortgage broker or financial adviser. Find one through MoneySmart.