Appraisal Gap Calculator

Background.

This appraisal gap page is built to estimate extra cash when lender proceeds tied to appraised value plus planned down payment do not reach price. An appraisal gap is the purchase-price amount not supported by valuation-based financing under the entered LTV. The implemented convention is “additional cash = max(purchase price − appraised value × lender LTV − planned down payment, 0).”

The editable entries are contract purchase price, appraised value, maximum loan-to-value on appraised value, planned down payment. Use values from the document or measurement that governs this appraisal gap question; the defaults are only the worked fixture below. Renegotiation, appraisal review, down-payment reallocation, mortgage insurance and reserve requirements can change cash needed. If that appraisal gap condition is not true, choose a calculation that models the missing convention.

Consumer Financial Protection Bureau, What is an appraisal? documents the convention or governing rule used here. The appraisal gap output is a transparent scenario under those facts: it does not manufacture an unentered market price, professional determination, carrier quote, legal eligibility finding or locally adopted code value.

What is appraisal gap calculator?

Appraisal Gap is the relationship behind this decision: an appraisal gap is the purchase-price amount not supported by valuation-based financing under the entered LTV. On this page it means additional cash = max(purchase price − appraised value × lender LTV − planned down payment, 0). Renegotiation, appraisal review, down-payment reallocation, mortgage insurance and reserve requirements can change cash needed; that is the line between the reported quantity and a broader real estate analysis.

How to use this calculator.

1. 01Confirm that “additional cash = max(purchase price − appraised value × lender LTV − planned down payment, 0)” matches the appraisal gap convention you need.
2. 02Replace the fixture values for contract purchase price, appraised value, maximum loan-to-value on appraised value, planned down payment with dated values from the governing record.
3. 03Keep all currencies, measurement units and time periods on the same basis before calculating.
4. 04Read additional cash required above planned down payment together with this boundary: Renegotiation, appraisal review, down-payment reallocation, mortgage insurance and reserve requirements can change cash needed.

The formula.

The calculation uses additional cash = max(purchase price − appraised value × lender LTV − planned down payment, 0). In this appraisal gap model, the entered terms are contract purchase price, appraised value, maximum loan-to-value on appraised value, planned down payment. An appraisal gap is the purchase-price amount not supported by valuation-based financing under the entered LTV, which is why the relationship is presented under this name rather than as a universal alternative. Renegotiation, appraisal review, down-payment reallocation, mortgage insurance and reserve requirements can change cash needed. Calculations keep full decimal precision through the relationship and round only the returned display values.

A worked example.

Frequently asked questions.

References& sources.

1. [1]Consumer Financial Protection Bureau, What is an appraisal?. Retrieved 2026-08-07. access: open unless marked otherwise.
2. [2]Fannie Mae. Single family selling guide. Retrieved 2026-08-07. independence: primary; access: open.
3. [3]U.S. Federal Housing Finance Agency. House price index. Retrieved 2026-08-07. independence: secondary-check; access: open.