You agreed to pay £300,000. The lender values the home at £280,000. Your planned £30,000 deposit could suddenly need to become £48,000. How can a £20,000 change in valuation mean finding another £18,000? The answer lies in which figure the lender uses to calculate the loan.
This guide is for buyers in England and Wales. Every calculation below is hypothetical and assumes a 90% lending limit throughout. It is not a mortgage quote or evidence that a lender will approve that percentage.
Start with the loan amount, not just the valuation
NatWest explains that a lower valuation can mean it lends against a percentage of whichever is lower, the price or its valuation. The actual decision depends on the application. Ask your own lender for the valuation figure, the maximum loan now available and the product terms it would use.
A £280,000 valuation alone cannot tell you the mortgage amount. Applying our assumed 90% gives £252,000. A different approved percentage produces a different answer, so write the confirmed loan beside the valuation before discussing a revised purchase price.
Where the extra £18,000 comes from
Before the valuation, the plan was a £270,000 mortgage plus £30,000 of your money. After a £280,000 valuation, our assumed loan becomes £252,000. With the price unchanged at £300,000, your contribution towards that price becomes £48,000.
- Original contribution — £300,000 minus £270,000 = £30,000.
- Revised contribution — £300,000 minus £252,000 = £48,000.
- Additional cash — £48,000 minus £30,000 = £18,000.
The valuation fell by £20,000, while the assumed loan fell by 90% of that amount. That is why this funding gap is £18,000. The calculation excludes taxes, legal fees, surveys, moving and repairs. Keep your buying-cost budget alongside it.
A £10,000 reduction still leaves a gap
Suppose the seller accepts £290,000 and the lender confirms the same £252,000 loan. You would need £38,000 towards the price, still £8,000 more than the original plan. Meeting halfway on price would reduce the problem without eliminating it.
At a £280,000 price with the same assumed mortgage, the contribution would be £28,000. These are alternative scenarios, not predictions of what the seller or lender will accept. Recalculate using the actual revised loan and price before treating a compromise as affordable.
Make the next conversation specific
Ask your lender or adviser, “What loan is available against this valuation, and would a different purchase price or cash contribution change the terms?” Ask the agent, “Would the seller consider a revised price based on the confirmed funding gap?” Ask your conveyancer, “What commitments have I already made, and what must be checked before proceeding?”
GOV.UK says an offer can be renegotiated before exchange, while warning that late changes can delay or derail the purchase. A lower valuation gives you a reason to discuss the numbers, not a guaranteed price reduction. Have your conveyancer explain your position before taking an irreversible step.
Keep valuation and condition survey separate. The lender assesses value for lending, while a survey investigates the home’s condition. If your offer has only just been accepted, our next mortgage and property-check steps put those tasks in context.
Before deciding, record the confirmed loan, proposed price and cash remaining after purchase costs. Filling the funding gap is one calculation. Knowing what would remain available afterwards gives you the next question to answer.