Appraisal Gap Calculator
Calculate your appraisal gap and understand your options when the appraised value falls short of your offer price. See how much extra cash you need and what strategies are available.
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Appraisal Gap
$30,000
Appraisal is $30,000 below offer — you need extra cash or must renegotiate
Appraisal Gap
$30,000
Original Down Payment
$84,000
Cash Needed (down + gap)
$114,000
Can You Cover the Gap?
No
Remaining Cash After Closing
-$24,000
New LTV (based on appraisal)
74.3%
Your Options:
Cover the gap
Pay $30,000 extra cash at closing
Pay $30,000 extra cash at closing
Renegotiate to $390,000
Ask seller to match appraised value
Ask seller to match appraised value
Meet in middle ($405,000)
Split the gap with the seller
Split the gap with the seller
Walk away
Use appraisal contingency to exit
Use appraisal contingency to exit
Advanced
Advanced Calculator
Strategy comparison with financial outcomes, market analysis for negotiating position
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Financial comparison of each strategy option:
Cover the Full Gap
$2,179/mo
Loan: $336,000
Cash needed: $114,000
Keeps deal alive at offer price
NOT FEASIBLE — insufficient cash
Renegotiate to $390,000
$2,024/mo
Loan: $312,000
Cash needed: $78,000
Save $30,000 vs offer
Meet in Middle ($405,000)
$2,101/mo
Loan: $324,000
Extra cash: $15,000
Seller concedes 50.0%
Pro
Professional Simulator
Full financing impact analysis (LTV, PMI, loan amount), appraisal contingency waiver risk assessment
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Loan at Offer Price
$336,000
20% down on $420,000
Loan Based on Appraisal
$312,000
20% down on $390,000
Loan Reduction
$24,000
Lender will finance less
LTV at Offer Price
80.0%
Used for PMI determination
LTV at Appraised Value
80.0%
PMI (Offer LTV)
None
No PMI
Monthly P&I (Offer)
$2,179
Monthly P&I (Appraisal)
$2,024
Total Monthly (Offer)
$2,179
P&I + PMI if applicable
Total Monthly (Appraisal)
$2,024
P&I + PMI
Monthly Difference
$156
Extra cost at offer price vs appraisal
PMI Difference
$0
Gap coverage may increase LTV into PMI zone
How to Use This Appraisal Gap Calculator
Enter your Offer Price (agreed purchase price) and the Appraised Value from the lender's appraisal. Set your planned Down Payment % and enter your Available Cash (total cash you have, including down payment funds). The calculator shows the gap amount, total cash needed, and whether you can cover it.
Lenders base loans on the lower of offer price or appraised value. If the home appraises below your offer, your loan amount is calculated on the appraised value — requiring extra cash to make up the difference.
Appraisal Gap Calculation
Appraisal Gap = MAX(0, Offer Price − Appraised Value)
Loan Amount = Appraised Value × (1 − Down Payment %)
Minimum Down Payment = Offer Price × Down Payment %
Total Cash Needed = Minimum Down Payment + Appraisal Gap
Remaining Cash = Available Cash − Total Cash Needed
Loan Amount = Appraised Value × (1 − Down Payment %)
Minimum Down Payment = Offer Price × Down Payment %
Total Cash Needed = Minimum Down Payment + Appraisal Gap
Remaining Cash = Available Cash − Total Cash Needed
Example: $30,000 Appraisal Gap
Offer $420,000, Appraises at $390,000
| Offer Price | $420,000 |
| Appraised Value | $390,000 |
| Appraisal Gap | $30,000 |
| Down Payment (20%) | $84,000 (on offer) |
| Total Cash Needed | $114,000 ($84K + $30K gap) |
| Loan Amount (based on appraisal) | $312,000 (80% of $390K) |
| New LTV on Offer Price | 74.3% |
| Option: Renegotiate to $390,000 | Save $30,000 in cash required |
This buyer must either bring an extra $30,000 in cash, convince the seller to drop the price to $390,000, split the gap, or walk away using the appraisal contingency.
Frequently Asked Questions
An appraisal gap is the difference between your agreed offer price and the value determined by the lender's appraiser when the appraisal is lower. Lenders only loan based on the appraised value, so if you offered $420,000 and the home appraised at $390,000, you need an extra $30,000 in cash or must renegotiate.
Your four main options: (1) Cover the gap in cash — pay the difference out of pocket. (2) Renegotiate the price down to the appraised value. (3) Split the gap — meet the seller halfway. (4) Walk away — use your appraisal contingency to exit with your earnest money returned. A fifth option is to request a Reconsideration of Value with new comparable sales data.
An appraisal gap coverage clause in your offer states you'll pay up to a specified amount above the appraised value. Example: "Buyer will pay up to $25,000 above appraised value." This makes your offer stronger in competitive markets by removing the seller's uncertainty about appraisal risk — but requires having the extra cash available.
Yes. Request a Reconsideration of Value (ROV) through your lender. Your agent can submit recent comparable sales the appraiser may have missed. The appraiser must review and respond to new information. Success rates vary — ROVs work best when there are legitimate comparable sales that were overlooked, not just because you don't like the number.
Low appraisals affect about 8–12% of transactions. They're most common in fast-rising markets where prices move faster than appraisers can document, and in competitive bidding situations where final prices exceed recent comparable sales. In cooling markets, appraisals are more likely to support the negotiated price.