Home Appraisals in Canada: What to Expect

A home appraisal in Canada is an independent, lender-ordered opinion of what your property would sell for on the open market. It typically costs a few hundred dollars, takes a few business days to arrange, and is usually paid by the borrower as a closing cost. Lenders use it to confirm the home is worth at least the amount they are being asked to lend against it.

Why lenders insist on a home appraisal

A mortgage is a secured loan. If you stop paying, the lender's fallback is to sell the property and recover what it is owed. That makes the property's value the lender's real protection, so it wants an independent number rather than your purchase price or your opinion.

Federally regulated lenders must follow OSFI Guideline B-20, which requires sound underwriting and a defensible property valuation. Insurers add their own layer: CMHC mortgage default insurance and private default insurance are normally required when your down payment is under 20%, and a valuation supports that coverage.

Not every file needs a full interior appraisal. Lenders sometimes accept an automated valuation model, a desktop review, or a drive-by appraisal, especially on renewals, switches, or low loan-to-value files. Whether yours needs the full version is the lender's call, not yours.

Who orders it, who pays, and how it works

The lender orders the appraisal, not you. That matters, because the appraiser's duty of care runs to the lender. You cannot shop for the appraiser or direct the value they conclude.

1. The lender places the order with an appraisal management company or its own panel.
2. The appraiser books a visit, often within a few business days, through you or your real estate agent.
3. They inspect the home, measure it, photograph it, and note condition, upgrades, and obvious problems.
4. They research recent comparable sales nearby, adjust for differences, and settle on a value.
5. The report is delivered to the lender, usually within a few business days to about a week.

You generally do not receive the report directly. You can ask your lender or mortgage broker for a copy, but they are not obliged to hand over the full document. Expect the fee to appear on your statement of costs; see closing costs when buying a house in Canada for where it fits in your cash-to-close.

What appraisers look at — and what they ignore

What drives the number

• Location, neighbourhood, lot size, and zoning
• Above-grade square footage, layout, and usable living space
• Bedroom and bathroom count, garage, and parking
• Age, condition, and major renovations — permitted work counts most
• Recent comparable sales, active listings, and local market conditions

What they largely ignore

• Your furniture, decor, and personal taste
• Emotional attachment, or the price you agreed to pay
• Unpermitted or unfinished work, which may add nothing or raise questions

Do not confuse this with a home inspection, which examines the building's systems and defects for your benefit. Nor with a property tax assessment, which is a mass valuation used for municipal taxation and is often well below market value. An appraisal is a one-property, market-value exercise for the lender.

What an appraisal costs in Canada

There is no single national price. Fees depend on province, property type, complexity, and travel distance, so confirm the exact amount with your lender or broker before you commit. The table below shows the shape of it, not a quote.

Appraisal type	Typical cost pattern	Who pays
Full interior appraisal, detached home	Roughly a few hundred dollars; higher in remote or expensive markets	Borrower
Condominium or small property	Often toward the lower end of the range	Borrower
Rush, after-hours, or complex property	Charged above the standard fee	Borrower
Re-inspection or second appraisal	Another full or partial fee	Borrower

Occasionally a lender absorbs the cost on a refinance or a promotional purchase, and occasionally it is folded into your mortgage. For the full list of one-time costs, see appraisal, inspection, and title insurance costs.

What happens if the appraisal comes in low

This is the outcome that matters. If the appraised value is below the purchase price, the lender bases your mortgage on the lower figure, and you have a shortfall to cover. Your realistic options are:

• Increase your down payment to close the gap.
• Renegotiate the price with the seller, if the contract permits.
• Request a second appraisal, though nothing guarantees a different result.
• Rely on a financing condition in your offer — never waive one without getting your own advice.

A lower value also raises your loan-to-value ratio, which can change whether you need CMHC mortgage default insurance and how much that coverage costs. In a fast-moving market, values can shift between the date you signed and the date the appraiser visits.

How an appraisal fits into your mortgage approval

An appraisal confirms collateral. It says nothing about whether you can carry the payments, and it does not replace underwriting. Your lender still tests your GDS and TDS ratios — see GDS and TDS ratios explained — and applies the federal mortgage stress test, which qualifies you at the higher of your contract rate plus two percentage points or the published qualifying-rate floor. Confirm the current floor with OSFI or your lender rather than assuming a number.

This is also why a pre-approval is not a promise. It estimates what you might borrow; final approval on a specific home depends on the appraisal, clear title, and your documents. If your closing date is tight, ask early whether an appraisal will be required so it does not become the bottleneck.

Preparing for the appraisal visit

• Confirm the appointment and make sure every room, the basement, and the attic hatch are accessible.
• Gather a list of recent upgrades with dates, and any permits or receipts you have.
• Have your property tax assessment and floor plans on hand if you own them.
• Tidy the home, but do not spend on staging — condition moves the number more than decor does.
• Secure pets, clear the driveway, and leave contact details with your agent.

Budget the fee alongside your other one-time costs. A closing costs calculator can help you total them, and the true cost of owning a home in Canada covers the ongoing side of the ledger.