How much does a home appraisal cost in Canada?

A standard residential appraisal costs $300–$500. The lender typically orders the appraisal and may or may not pass the cost to the borrower. Some lenders cover the appraisal fee as part of their mortgage package. Rural, waterfront, or high-value properties may cost $500–$1,000+ due to complexity and fewer comparable sales.

What do home appraisers look at in Canada?

Appraisers evaluate the property condition (structure, roof, systems), size and layout (square footage, number of bedrooms/bathrooms), lot size and features, location and neighbourhood, recent comparable sales (comps), any renovations or upgrades, and any defects or issues that affect value. They do not look inside walls or perform a home inspection.

What happens if the appraisal is lower than the purchase price?

If the appraisal is lower than the purchase price, the lender will only mortgage the appraised value — not the purchase price. You must make up the difference with additional cash, renegotiate the purchase price with the seller, request a second appraisal (some lenders allow this), or walk away if you have a financing condition.

Can I challenge a low home appraisal?

Yes. You or your mortgage broker can submit a reconsideration of value (ROV) to the appraisal company, providing additional comparable sales or correcting factual errors (wrong square footage, missing renovations). You can also request a second appraisal from a different appraiser, though this costs additional money and is not guaranteed to produce a higher result.

Who pays for the home appraisal?

It depends on the lender. Some lenders absorb the cost as part of the mortgage process. Others charge the borrower directly ($300–$500) or deduct it from the mortgage advance. In competitive lending environments, covering the appraisal fee is a common incentive for lenders to attract borrowers.

Is a home appraisal the same as a home inspection?

No. An appraisal determines the market value of the property for the lender. An inspection evaluates the physical condition of the property for the buyer. Appraisers note obvious defects but do not check behind walls, under floors, or test individual systems. You need both — the inspection protects you, and the appraisal protects the lender.

Home Appraisal in Canada: What to Expect, Costs & How to Challenge

The home appraisal is a critical step in the mortgage process that many buyers don’t fully understand. The lender orders an appraisal to confirm the property is worth what you’re paying — and if the appraisal comes in low, it can derail your purchase. Here’s how the appraisal works, what to expect, and what to do if it doesn’t go in your favour.

Why lenders require appraisals

The lender is using the property as collateral for your mortgage. They need to confirm that if you default, they can sell the property and recover their money. The appraisal protects the lender, not you — but it indirectly protects you from overpaying.

Purpose	Details
Confirm market value	Ensures the property is worth the purchase price
Calculate loan-to-value (LTV)	Determines how much the lender will finance
Identify major issues	Obvious structural defects, environmental problems
Satisfy insurance requirements	CMHC/insurer needs value confirmation for insured mortgages

What happens during an appraisal

Stage	Details	Duration
Lender orders appraisal	After your mortgage application and purchase agreement are submitted	1–3 days
Appraiser visits property	Physical inspection of interior and exterior	30–60 minutes
Comparable sales analysis	Appraiser researches recent sales of similar properties	Part of the report
Report completed	Written appraisal report submitted to the lender	3–7 business days
Lender reviews	Underwriter reviews the report and confirms value	1–3 business days

What appraisers evaluate

Interior

Factor	What They Look At
Square footage	Total living area (above-grade and below-grade)
Layout	Number of bedrooms, bathrooms, functional layout
Condition	Age and condition of finishes, flooring, paint
Kitchen and bathrooms	Updated vs original, quality of materials
Basement	Finished vs unfinished, height, walkout access
Systems	Age and condition of furnace, water heater, electrical panel
Renovations	Quality of work, whether permitted

Exterior and property

Factor	What They Look At
Lot size and shape	Regular lot vs irregular, usable space
Structure	Foundation, roof, siding condition
Garage/parking	Attached, detached, number of spaces
Landscaping	General condition and curb appeal
Outbuildings	Sheds, pools, decks, accessory structures
Access	Road access, private vs public road

Location and market

Factor	What They Look At
Neighbourhood	Quality, amenities, schools, transit
Comparable sales	Similar properties sold in the last 6 months within the area
Market conditions	Rising, stable, or declining market
Zoning	Confirmed legal use
Environmental	Proximity to highways, rail, industrial, flood zones

Appraisal cost

Property Type	Typical Cost
Standard residential (urban)	$300–$500
Condo	$250–$400
Rural property	$500–$800
Waterfront property	$500–$1,000
Luxury/high-value home	$750–$1,500
Multi-unit residential	$500–$1,000+

Appraisal vs home inspection

Factor	Appraisal	Home Inspection
Purpose	Determine market value (for the lender)	Evaluate physical condition (for the buyer)
Who orders it	Lender	Buyer
Cost	$300–$500	$350–$600
Duration	30–60 minutes	2–4 hours
How thorough	Surface-level observation	Detailed systems check
Checks behind walls	No	No (but can recommend specialists)
Tests HVAC, plumbing, electrical	Notes age/condition only	Tests function and identifies issues
Report focus	Dollar value and comparables	Property condition and defects
Required for mortgage	Yes (by most lenders)	No (but strongly recommended)

You need both. The appraisal ensures the price is fair. The inspection ensures the property is sound.

→ See: Home Inspection Guide Canada

What to do if the appraisal comes in low

A low appraisal means the property was appraised for less than the purchase price. This is a problem because the lender will only mortgage the appraised value.

Example

Detail	Value
Purchase price	$600,000
Appraised value	$560,000
Mortgage (80% LTV)	$448,000 (based on appraised value, not purchase price)
Your required down payment	$152,000 (instead of $120,000)
Gap you need to cover	$32,000 extra

Your options

Option	Pros	Cons
Renegotiate the price	Saves cash; price reflects true value	Seller may refuse
Cover the gap with cash	You keep the deal	Requires additional funds
Request a second appraisal	May get a higher value	Costs another $300–$500; not guaranteed
Submit a reconsideration of value	Free; provides new comparable data	Appraiser may not change their opinion
Walk away (with financing condition)	Protects you from overpaying	You lose the property
Push back through your broker	Broker may have relationships with lender underwriters	Results vary

How to submit a reconsideration of value

Review the appraisal report — Ask your broker for a copy (you have the right to see it)
Identify errors — Wrong square footage, missing renovations, incorrect lot size
Provide better comparables — Recent sales of truly similar properties that support a higher value
Submit through your broker — They send the reconsideration package to the appraisal company
Wait for review — Typically 3–5 business days

Success rate: Reconsiderations succeed roughly 20%–30% of the time when strong comparable sales data is provided.

How to prepare your home for an appraisal (sellers and refinancers)

Action	Impact
Clean and declutter	Makes spaces feel larger and better maintained
Complete minor repairs	Fix leaky faucets, patch drywall, replace burned-out lightbulbs
Provide a list of upgrades	New roof, furnace, kitchen — with dates and approximate costs
Ensure access to all areas	Basement, attic, garage, crawl space
Provide recent comparable sales	The appraiser will research their own, but supporting data helps
Do not over-renovate	Cosmetic updates help; major renovations may not return full value

When appraisals are not required

Situation	Why
Insured mortgage (under 20% down)	CMHC or other insurer may use automated valuation models (AVM)
Mortgage renewal with same lender	Lender already knows the property
Some refinances	If LTV is low and the lender’s AVM confirms value
Low-ratio mortgage (under 65% LTV)	Lower risk to lender; some waive the in-person appraisal

Even when a physical appraisal is waived, the lender still assesses property value — they just use automated data instead of an in-person visit.