Bank valuation below the price: protect the CPCV
How to avoid deposit risk when the bank valuation is below the price: LTV, pre-approval, FINE, deadlines and CPCV clauses.
A bank valuation can turn an apparently agreed purchase into a cash problem. The buyer agrees a price, expects mortgage finance, signs the CPCV and only then finds out that the bank valued the home below the purchase price.
The risk is not that the bank "dislikes" the property. It is mathematical: in Portugal, the lending limit is calculated on the lower of the purchase price and the property valuation. If the valuation comes low, you may need more equity even when your affordability looked comfortable.
Key takeaways
- Mortgage pre-approval is not final mortgage approval.
- LTV uses the lower of purchase price and bank valuation.
- Before paying a deposit, protect the minimum loan amount you need in the CPCV.
What is really at risk
Imagine you buy for 300,000 euros and expect 90% financing for a main home. If the bank also valued the property at 300,000 euros, the theoretical lending limit would be 270,000 euros.
But if the valuation comes back at 270,000 euros, the 90% applies to 270,000 euros, not to the agreed price. The maximum loan would become 243,000 euros. The 27,000 euro gap has to be covered with extra equity, renegotiation or another solution.
If the CPCV does not include a clear financing and valuation condition, a low valuation can leave the buyer between two bad options: find more cash than planned or fail to complete the promissory contract.
Run the numbers before making the offer
Before negotiating the deposit, test three scenarios. You do not need to predict the exact valuation. You need to know where your limit is.
| Scenario | Question to answer |
|---|---|
| Valuation equals the price | Do I have deposit, taxes, bank costs, completion costs and a buffer? |
| Valuation 5% below | Can I cover the gap without using money reserved for taxes or urgent works? |
| Valuation 10% or 15% below | Does the CPCV let me exit, renegotiate or extend without losing the deposit? |
This calculation helps set the offer, the deposit and the financing condition. Percentages are not enough. What matters is the minimum loan amount you need to buy safely.
What to confirm before signing the CPCV
The dangerous step is signing the CPCV based on a simulation, an informal message or a generic pre-approval. The bank still has to analyse the property, order the valuation, review documents and issue final approval.
Checklist before the CPCV
- request simulations from more than one bank or intermediary;
- confirm the maximum financing percentage that applies to your case;
- calculate the impact of a low valuation in euros, not just as a percentage;
- set realistic deadlines for valuation, final approval, FINE and completion;
- avoid a large deposit before the valuation risk is controlled;
- include a written CPCV condition tied to the loan you need.
When you receive the approved FINE and the draft mortgage contract, check that the conditions match what you need: amount, term, rate, insurance, fees, spread, guarantees and likely completion date.
If the valuation is below the price
First, ask for the valuation report. The bank should make it available, and it is useful for understanding comparables, property condition, areas, location and any valuer reservations.
Then separate the options:
Practical options
- renegotiate the price with the seller, using the valuation as objective evidence;
- add more equity, if that does not compromise taxes and your buffer;
- request a second valuation, knowing it may cost money and consume time;
- try another bank, using the report where it can be reused;
- terminate the CPCV only if the signed clause gives you that right.
You can disagree with the valuation and complain in writing. But a complaint does not force the bank to lend or automatically turn the valuation into the purchase price. Treat the CPCV deadline as critical.
How to protect the deposit in the CPCV
A vague "subject to bank approval" clause may be too weak if the issue is loan amount. The buyer should try to make the condition state the minimum financing needed and that this financing depends on a compatible bank valuation.
Points to discuss with a lawyer or solicitor
- minimum approved loan amount, for example "at least X euros";
- deadline for valuation and final bank approval;
- documents the buyer must provide to the bank without delay;
- right to terminate and recover the deposit if the loan is refused because of valuation;
- ability to extend deadlines if the bank is still issuing the FINE or draft contract.
The goal is not to transfer every risk to the seller. It is to make clear that the buyer only becomes definitively committed if the required finance is approved for that specific property.
FAQ
Does pre-approval protect my deposit?
Will the bank finance 90% of the price?
Can I ask for a new valuation?
Next step
Before signing the CPCV, write down: price, minimum valuation needed, minimum loan needed, equity available and deadline to completion. If a low valuation would make the purchase impossible, that condition should be in the CPCV before you pay the deposit.
More guides
June 28, 2026
Bank valuation below the price: avoid a mortgage shortfall
What to do if the bank valuation is below the purchase price: LTV, down payment, CPCV, deposit, FINE and options before completion.
June 12, 2026
Mortgage pre-approval vs final approval in Portugal
How to tell simulation, pre-approval and final mortgage approval apart before signing the CPCV or booking the deed in Portugal.