valuation during loan

How do property valuations during the life of the loan affect interest rates on the loan?

If you get a valuation that is a lower than the original price of the property, will the lender raise the interest rate on the loan?

Do lenders conduct valuations during the life of a loan and adjust interest rates accordingly?

 

Ain't nobody got time for that. Unless you're enquiring or switching product or poking them in any way, they don't really care. Out of sight, out of mind.

 

Valuations if lower than original property price doesn’t impact interest rate with current lender. But, if you are willing to refinance or cash out or do any additional loans on that property than whether current or new lender both will look into the new valuation receive regardless of original price.

 

no, but if you get a bank valuation that is higher they may drop the interest rate.

 

Lenders don't do valuations post settlement and won't increase your rates if the value drops.

At the same time, they won't automatically give you better rates if the value increases. You have to go out of your way to ask.

 

No and No

 

Doesn't happen in Residential lending

 

No they won't, banks have better things to do then downgrading a client with a higher rate cause of a higher LVR.

Some clients are probably sitting on negative equity.

 

The banks reserves the right to request valuation on most commercial loans.
They usually cherry pick the higher value ones working on 80/20 rule . So a few of the higher values each year .
The top twenty properties are usually worth 80% of the value of the portfolio.