Bank Valuation Lower Than Your Property Price? How the Home-Loan Gap Works in Bengaluru

About this guide

You agree to buy a Bengaluru flat for ₹80 lakh. You have planned your down payment, arranged registration money and applied for a home loan based on that price. Then the lender's technical valuation comes back at ₹75 lakh. Nothing about your salary has changed. Your credit score is the same. Yet the loan amount the lender is comfortable with can now be lower. This is the valuation gap — and it catches many buyers late because they assume the bank will finance a percentage of the sale agreement value automatically. The bank finances against its acceptable property value, not your excitement A lender has to look at the property as security. The price agreed between buyer and seller is important, but the lender's own valuation and policy also matter. If the lender considers the realisable or acceptable value lower than the transaction price, the loan-to-value calculation can be constrained by that lower figure. RBI's housing-finance framework uses Loan-to-Value, or LTV, as an important prudential measure. The exact maximum loan also depends on lender policy, borrower eligibility and…