You have agreed to pay €200,000, but the report submitted to the bank values the home at €180,000. The €20,000 difference does not disappear: it is the part of the price above the valuer's assessment of market value. The bank calculates its loan-to-value ratio (LTV) against the lower figure, so you must cover more of the price yourself or negotiate again with the seller.
However, the extra cash required is not simply €20,000. It depends on your LTV limit, the bank's lending decision and whether the seller will change the price. Below are the calculation, four practical options and the financing and valuation condition to discuss before paying a purchase deposit—the advance paid to the seller towards the price, as distinct from the total contribution your lender requires from your own funds.
A €200,000 price and a €180,000 valuation: what is the actual shortfall?
The Bank of Lithuania explains that the loan cannot exceed a specified proportion of the valuation or the purchase price, whichever is lower. Under the rules effective from 1 August 2026, qualifying first-home borrowing may have a 90% LTV limit; the usual limit is 85%, while a second or subsequent housing loan may be subject to a 70% limit. Eligibility and exceptions matter, and lenders can apply stricter limits. The examples below assume that the bank has confirmed the stated LTV for your circumstances; they are not a promise of financing for every buyer.
| Scenario | Value used for lending | Theoretical maximum loan | Your own funds |
|---|---|---|---|
| €200,000 valuation, 90% LTV | €200,000 | €180,000 | €20,000 |
| €180,000 valuation, 90% LTV | €180,000 | €162,000 | €38,000 |
| €200,000 valuation, 85% LTV | €200,000 | €170,000 | €30,000 |
| €180,000 valuation, 85% LTV | €180,000 | €153,000 | €47,000 |
Fill in your own purchase budget
Copy these five rows into your notes and replace the example figures with your own. This is a fictional worked example, not market data, quoted fees or a bank offer. Confirm the LTV applicable to you with the lender; the calculation uses the Bank of Lithuania's lower-price-or-valuation rule cited above.
| Input | Example | Your figure |
|---|---|---|
| P – agreed purchase price | €200,000 | €_____ |
| V – valuation accepted by the bank | €180,000 | €_____ |
| L – LTV limit applicable to you | 90% (use 0.90 in calculations) | _____% |
| S – savings allocated to the transaction, after setting aside an emergency reserve | €35,000 | €_____ |
| C – additional transaction costs paid from those savings | €3,000 | €_____ |
For C, use your own quotes for valuation, notarial, registration and other services needed for this transaction. €3,000 is simply an assumption here. Calculate the whole transaction from the start: include any advance already paid in S if it is credited towards the price, and do not add it to C as well. Include transaction costs already paid from the same savings in both S and C.
- LTV loan ceiling: min(P, V) × L = €180,000 × 0.90 = €162,000.
- Your contribution to the price: P − loan amount = €200,000 − €162,000 = €38,000.
- Total savings needed: contribution to the price + C = €38,000 + €3,000 = €41,000.
- Cash shortfall: total needed − S = €41,000 − €35,000 = €6,000. A negative result means money remains after the planned costs.
Once you have a specific lender offer, use its loan amount from step two onwards. If the bank offered €155,000, the same budget would leave a shortfall of €200,000 − €155,000 + €3,000 − €35,000 = €13,000. A zero shortfall only means the savings cover this calculation; it does not establish creditworthiness or fulfilment of the loan's payment conditions.
Why might the valuation be below the seller's price?
The asking price reflects the seller's expectations; the agreed price reflects a negotiation between particular parties; and the valuation is an independent opinion of market value on a specific date. The valuer uses comparable completed sales and adjusts for differences in location, floor area, condition, finish, construction year, registered use and other characteristics. Emotional attachment, plans for future renovation or a buyer's determination to live there do not automatically increase market value.
A difference does not necessarily mean the valuer made a mistake. It may point to an ambitious price, an unusual property, too few closely comparable sales or a rapidly changing market. That is why a city's house price index is not the value of an individual apartment. Before making an offer, compare it with actual sales of similar properties.
Check the report before looking for extra money
If the valuation comes back at €180,000, work through these steps:
- Read the whole report. Check the floor area, registered use, completion status, associated property, description of condition and comparable sales. A factual error is a reason to correct the report; disliking the final number is not.
- Get the bank's figures in writing. Ask which valuation it accepts, which LTV applies and the maximum loan after assessing your income and other commitments. The €162,000 in the table is a ceiling, not a promise to lend.
- Notify the seller before the contractual deadline. Sharing the report and a specific financing shortfall early leaves more time for negotiation or a second valuation.
Four options when the mortgage valuation is too low
1. Contribute more of your own money
If the property is worth the price to you and you will still have a financial reserve after buying, you may choose to add the missing funds. However, Bank of Lithuania rules do not allow the required mortgage deposit to come from borrowing. A consumer loan would also increase your commitments and could reduce your mortgage offer. The bank's responsible lending guidance makes this clear. Our article on the 10% first-home deposit explains the relevant eligibility rules in more detail.
2. Renegotiate the price
A valuation gives you an objective basis for negotiation. If the seller reduces the price from €200,000 to €190,000 while the valuation remains €180,000, a 90% LTV loan still cannot exceed €162,000. But your own contribution falls from €38,000 to €28,000. Within this price range, each euro off the price reduces the cash you need by one euro.
3. Commission a second valuation
This may make sense if the first report contains inaccuracies or uses properties that are difficult to compare. Ask the bank first which valuers it accepts. The Bank of Lithuania notes that lenders' lists differ, while SEB explains that checking the acceptability of a valuer outside its list can take time. Another report means another cost and guarantees neither a €200,000 valuation nor a mortgage.
4. Withdraw under the preliminary agreement
If you do not have the extra money, the seller will not reduce the price and another well-founded valuation does not change the position, withdrawing may be the safest option. Whether the advance is refunded and whether penalties apply depends on the contract. This is particularly important when you have already paid a purchase deposit without final mortgage approval.
What condition should the preliminary agreement include?
“The buyer will purchase with a mortgage” is not enough. The clause needs objective thresholds, a deadline, evidence requirements and consequences. A practical starting point could read as follows:
Specify the minimum loan and valuation you need rather than a vague “negative bank response”. If you can contribute at most €25,000 towards a €200,000 price, you need a €175,000 loan. At 90% LTV, the valuation must be at least approximately €194,445 (€175,000 / 0.90), and the bank must still approve your creditworthiness. Also address the seller's duty to provide documents and allow the valuer to inspect the property.
Lithuania's Civil Code gives a preliminary agreement real legal consequences, so do not copy online wording without considering your transaction. A notary or lawyer should review the clause, refund arrangements and penalties for your circumstances. A Lithuanian notary formalises the main property sale and checks its legal requirements. Reviewing the clause does not guarantee a mortgage or identical interpretation in every dispute.
Reconcile the amounts and deadlines before deciding
Get three figures in writing: the bank's loan offer, the price agreed with the seller and your maximum contribution after allowing for a reserve and transaction costs. Then check whether the valuation, financing and payment deadlines fit the agreement. If the budget does not work, address the price or contract terms before the deadline expires.
If you will fund this purchase by selling your current home, do not count sale proceeds you have yet to receive as available savings. Our plan for selling one home and buying another helps you coordinate the two payment schedules. If your current home is mortgaged, also check how to involve the lender in its sale.
Frequently asked questions
Can the bank still finance the agreed price if the valuation is lower?
The bank can lend only what your creditworthiness, its internal criteria and the loan-to-value limit allow. That limit is calculated against the lower of the purchase price and the accepted valuation. Agreeing to a higher price does not increase the value on which the bank bases its lending.
How much of my own money do I need for a €200,000 purchase valued at €180,000?
If you qualify for first-home lending and the bank applies 90% loan-to-value, the theoretical maximum loan is €162,000, leaving €38,000 to fund yourself. At 85% loan-to-value, the maximum is €153,000 and your contribution is €47,000. The actual loan offer may be lower, and transaction costs are additional.
Can I cover the valuation gap with a consumer loan?
The required mortgage deposit cannot be funded with borrowed money. A new loan would also increase your monthly commitments and could reduce the mortgage available to you. Discuss the source of your funds and your individual circumstances with the lender in advance.
Is a second valuation worth ordering?
Consider it if the first report contains factual errors, uses questionable comparable properties or the bank confirms in advance that it will accept another independent valuer's report. A second valuation does not guarantee a higher value or a larger loan.
Must the seller reduce the price to match the mortgage valuation?
No. The agreed price and the valuer's assessment of market value are different figures. The seller may reduce the price, agree to share the gap or keep the terms unchanged. The outcome depends on negotiations and the preliminary agreement.
Does a financing condition automatically mean my purchase deposit will be refunded?
No. Refunds, penalties, acceptable evidence and deadlines need to be clearly addressed in the preliminary agreement. A general statement that the purchase will use a mortgage does not explain what happens if the valuation or financing is insufficient.
What minimum valuation should I put in the preliminary agreement?
Work backwards from the maximum amount of your own money you can put towards the purchase. If that is €25,000 on a €200,000 purchase, you need a loan of at least €175,000. At 90% loan-to-value, the accepted valuation would need to be approximately €194,445 or more. The lender must still assess your income and risk.
Who pays for a second valuation?
The buyer generally pays for the valuation and any repeat valuation, unless otherwise agreed with the seller or lender. Before ordering another report, get confirmation from the bank that it will be acceptable.