Bank Valuation Below the Purchase Price in Portugal: What to Do

A lower bank valuation changes the base used to calculate the loan. It does not, by itself, prove that the agreed price is wrong.

The Bank of Portugal explains that the property value for LTV purposes is the lower of the purchase price and appraisal. The published limits are caps, not an entitlement to that amount.

Calculate the real gap

If the price is €250,000, the valuation €220,000 and the applicable maximum were 90%, the illustrative loan ceiling would be €198,000. The buyer would need €52,000 to complete the price, plus taxes, registration, credit costs, insurance and a reserve. The bank may approve less after its creditworthiness assessment.

A disciplined response

1. Obtain the full report and check areas, annexes, use, condition, comparables, limitations and documents considered. The bank must provide the valuation documents after receiving them.
2. Separate asking price, agreed price, bank valuation and personal value. They answer different questions.
3. Rebuild the complete budget and keep an emergency reserve.
4. Have the CPCV finance clause, evidence requirements and deadlines reviewed. A low valuation does not automatically create a right to withdraw or recover the deposit.
5. Correct objective errors with documents.
6. Consider a written complaint or second valuation. Official guidance confirms these options, while the lending decision remains with the bank.
7. A qualifying recent report prepared for another institution may be proposed under the conditions described by the Bank of Portugal.
8. Compare renegotiating the price, adding funds without exhausting reserves, using another lender, or not proceeding.

Treat the appraisal as one credit-risk input. It is not a legal, planning or technical inspection of the property.

Paid deposit and public guarantee: count each amount once

In the €250,000 price / €220,000 valuation / €198,000 loan example, a €20,000 deposit already paid leaves €32,000 of the buyer’s funds still due towards the price at completion: 250,000 − 198,000 − 20,000. The deposit is part of the €52,000 total equity, not an extra cost. Add unpaid taxes, fees and the reserve separately.

The public guarantee for eligible young buyers does not erase an appraisal gap. The BdP describes contracts concluded by 31 December 2026 for a first permanent home with a transaction value up to €450,000, subject to all buyers/borrowers meeting the conditions and to lender approval. The base remains the lower of price and valuation. Even a hypothetical 100% loan against €220,000 would leave €30,000 towards the €250,000 price; after the €20,000 paid deposit, €10,000 would remain, plus other costs. The guarantee is not free money and does not release the borrower from debt.

Ask for the approved loan, calculation base, offer expiry and alternative costs in writing. Under the BdP’s appraisal rules, a report from another lender must meet specific conditions and be under six months old; relevant market changes can justify a reasoned refusal once it is over three months old. A usable report does not guarantee a loan. Take the revised budget and CPCV clause to the lender and legal adviser before changing deadlines.

Editorial review: 21 October 2026, using the official sources linked here. General information; obtain professional advice for the particular transaction.