Do You Need a Valuation to Refinance?
Sometimes an online estimate is enough. Sometimes the lender wants a registered valuer through the door. Here's how lenders decide, what it costs you, and what to do if the figure comes in low.
Why the value matters in a refinance
The new lender is lending against your property, so it needs to know what the property is worth. The value sets your loan-to-value ratio, and that drives three things: whether the lender will take you, the rate you're offered, and whether any cash contribution is paid.
The three kinds of value lenders use
| Type | What it is | When lenders accept it |
|---|---|---|
| Council rating valuation (RV or CV) | The figure on your rates notice, set for rating purposes. | Some lenders, when you have plenty of equity. It can be years out of date. |
| Online estimate (e-valuation) | A computer estimate from recent sales data. | Common for standard homes with 20% or more equity. |
| Registered valuation | A report by a registered valuer who inspects the home. | Low equity, borrowing more, unusual properties, or where the estimate is unreliable. |
Which one applies depends on the lender and your equity. Apartments, lifestyle blocks, leasehold land and homes with recent major renovations nearly always need a registered valuation.
Order it the right way
Most lenders only accept registered valuations ordered through their own valuation panel system, addressed to them. A report you commissioned privately last month, or one addressed to another bank, may be rejected, and you'd pay twice.
So don't order one until you know which lender you're applying to. We arrange it through the lender's system once the choice is made. You pay the valuer's fee, which varies by region and property type.
If the valuation comes in low
It happens, particularly when you're hoping to be just under a threshold like 80%. Your options:
- Check the report. If the valuer missed a renovation or used poor comparable sales, the lender can ask for it to be reviewed. Give the valuer a list of improvements at the inspection to head this off.
- Change the loan. Borrow a little less, or pay the balance down, so the ratio works.
- Accept low-equity pricing. If it's still the better deal after the margin, go ahead with eyes open.
- Try a lender with a different approach. Another lender may accept a different valuation method.
- Stay put for now. Your current lender doesn't need a valuation to refix you.
Before the valuer arrives
Tidy up and finish the half-done jobs. Valuers aren't fooled by cushions, but an unfinished bathroom or an obviously leaking gutter does affect the figure. Have consents and code compliance certificates ready for any work done. Unconsented additions are often valued at little or nothing.
This article explains how New Zealand lenders generally assess these situations. It is general information, not personalised financial advice, and lender policy changes often — check your own position with a registered adviser. Official sources: Reserve Bank of New Zealand for lending policy and the OCR, and Sorted.org.nz for independent government-backed money guidance.
Refinance valuations: common questions
Not sure what your home will value at?
Tell us your address area, rough value and what you owe. We'll tell you which lenders will need a valuation and which won't, before you pay for one.
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- ✓ Break fees, legal costs and any cashback clawback worked out first
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