Valuation for a mortgage is essentially a formal report that an accredited valuer completes. Its goal is to determine a security property on a home loan's market value. Specifically, making sure that it's enough to cover the mortgage when a forced sale happens.

Appraisals and Valuations: Differentiation

Valuations tend to be formal reports prepared by qualified individuals. Appraisals, on the other hand, are less formal and tend to be performed by real estate professionals. In addition, appraisals are typically free services provided by a local real estate agent. Although appraisals are less official than valuations, they still provide comparable results. 

Valuations take the following factors into account:

  • Caveats on the property
  • Encumbrances on the property
  • Local council zoning
  • Location of the property
  • Property condition
  • Property size
  • Property type
  • Structural faults

On the other hand, appraisals are more likely to be determined on the basis of local area knowledge alongside sales prices' history.

Lenders require a formal property valuation when determining a home's value. This means purchasing a property cannot happen without it during settlement. It's also necessary when home loan refinancing is done with a different lender.

An appraisal is a professional opinion about the value of a home. At this point, the homeowner is working with a real estate agent to sell the property. The appraisal will help both parties set expectations about price, but it won't always be the price that sellers will get. The final price will be determined by the marketplace.

Refinancing & Valuations

Are you buying a home for the first time? When it comes down to the home loan being refinanced, a lender will likely need a valuation that's up to date. Refinancing a home loan means taking on a new loan so that the existing one can be paid.

Whether it's with a new lender or an existing one, the situation will likely have changed at that point. The lender will then go through the refinance application in order to have updated insights on the buyer's financial status. The same will happen to the property itself; the LVR (loan-to-value ratio) needs to be checked if it's still at a level acceptable for refinancing. After all, it's possible that the value of the property has either decreased or increased over time. 

Refinancing a property usually has a valuation that the lender is responsible for organising. There are still cases wherein it's possible to get valuation independently done for a property, however. 

For an independent valuation to be done, a CPV (certified practising valuer) should be sourced. Afterwards, it's vital to confirm with the lender that they will accept the independent valuation instead of theirs.

For the most part, lenders tend to organise valuation for free. Independent valuation, on the other hand, can run within the $300 to $600 range. Needless to say, it's ideal for a property to increase in value when it's being valued for a refinance.


Property valuation is a vital part of the homebuying process. It helps to determine figures that are vital to the overall sale. Refinancing and assessment are two ways of going about it.

Looking into refinance rates in Australia? Drop Wealthy You a line today! We’re an Australian mortgage company servicing Sydney for nearly a decade.