Appraisals in Canadian mortgage files: a broker's guide.

The decision sits with the lender and depends on factors like the property type, the loan-to-value ratio, and the lender's own risk model — there's no single rule that applies across every institution. Lower loan-to-value files and standard property types are more likely to qualify for an automated valuation model (AVM), while higher-ratio files, unique properties, or rural and unusual property types more often require a full on-site appraisal.

A broker generally won't know for certain which path a file will take until the lender confirms it after submission, which is one more reason to build a short buffer into the closing timeline rather than assuming the fastest-case scenario.

This varies. Some lenders order the appraisal directly and bill the cost to the borrower; in other cases, the broker or the borrower arranges it through an approved appraiser on the lender's list. There isn't a single industry-wide standard, which makes confirming the specific lender's process on each file worth doing rather than assuming it matches the last file.

What's consistent across lenders is the expectation that the appraiser comes from the lender's approved list — an appraisal from an appraiser the lender hasn't approved generally won't be accepted, regardless of who paid for it.

The mechanics are easier to see with a concrete number than in the abstract. Say a buyer in Ontario agrees to purchase a home for $600,000 with 20% down — a $480,000 mortgage, a loan-to-value ratio of 80%. If the appraisal comes back at $560,000 instead of the $600,000 purchase price, the lender will generally base the mortgage on the lower of the two figures, not the purchase price alone. At $560,000, an 80% loan-to-value mortgage is $448,000 — $32,000 less than the amount the file was originally structured around.

That $32,000 gap has to come from somewhere: a larger cash down payment if the buyer has it available, mortgage default insurance if the loan-to-value now needs to move higher to keep the deal at the original loan amount and the file otherwise qualifies for insurance, or a renegotiation with the seller. Whichever path the file takes, it's rarely a same-day fix, which is exactly why an appraisal shortfall discovered close to a financing condition deadline is one of the more disruptive events a broker deals with, rather than a minor paperwork adjustment.

Insured mortgages — those backed by CMHC, Sagen, or Canada Guaranty because the down payment is below 20% — are underwritten against the insurer's own valuation requirements as well as the lender's, which in practice often means the insurer's guidelines help determine whether a full appraisal or an automated valuation is acceptable, not the lender alone. On a conventional file at 20% down or more, the lender's own risk appetite is the only determining factor, which is part of why two files with a similar loan-to-value ratio can still be treated differently depending on whether default insurance is involved.

The most common delay is simply ordering it late — waiting until a condition deadline is close before arranging access to the property, rather than as soon as the lender confirms one is required. Scheduling access with the seller or current occupant, especially on a purchase, adds another layer of coordination that can slip if it isn't started early.

• →Ordering the appraisal only once a condition deadline is already close
• →Delays coordinating property access with a seller or current occupant
• →An appraised value that comes in below the purchase price, which can require the file to be re-worked

Order the appraisal the moment a lender confirms one is required, rather than waiting to see if it becomes necessary. Building appraisal status into regular file check-ins — the same way a broker tracks any other open condition — catches a scheduling problem while there's still time to fix it, instead of a few days before closing.

Coordinating appraisal timing alongside every other open condition is exactly the kind of ongoing tracking a fulfillment team handles across a full pipeline, so an appraisal delay is caught early rather than discovered at the last minute.