Computer augmented reality is a rapidly emerging field allowing users to mix virtual and real worlds. Our interest is to allow relighting and remodelling of real scenes, using a reflectance estimation method. Most previous work focused on the quality of the results without considering the expense in computation and the price of acquisition equipment. In this paper, we present a low–cost photometric calibration method which improves the reflectance estimate of real scenes. This is achieved by adapting high-dynamic range image creation to a low-cost camera, and an iterative approach to correct reflectance estimation using a radiosity algorithm for indirect light calculation.