If the Appraisal Comes In Low: What It Means in BC

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You and the seller agreed a price. Then the lender sent an appraiser, and the appraised value came back below that price. Nothing about your contract changes — you still owe the price you signed for. What changes is the size of the loan, because a lender does not lend against the price you agreed. It lends against its own number.

That gap is yours to cover in cash, or the deal has to change. This page explains exactly how the number is built, who it belongs to, what it does to your minimum down payment, and what you can and cannot do about it in British Columbia.

The short version

The lender lends against lending value, which CMHC defines as the lower of the market value or the purchase price. A high price cannot raise it. A low appraisal lowers it.
A low appraisal does not only shrink your loan. Because the minimum down payment tiers are calculated on lending value, it can raise the minimum cash you must put in.
Insured financing on a one- or two-unit home tops out at 95% of lending value, and the property value must be below $1,500,000. Both tests run on the lender’s number, not on yours.
You often pay for the appraisal and have no right to read it. The appraiser’s client is the lender.
A full appraisal is not compulsory. The federal regulator lists six valuation methods and tells lenders not to rely on any single one.
If you still hold a financing condition, you have a way out. If you have already removed your conditions, you are committed, and the money becomes the problem.
Your BC Assessment notice is not the number your lender uses. It is market value as of a 1 July, and BC Assessment itself says to ask a REALTOR® or a private appraiser for a current value.
Nobody in British Columbia licenses real estate appraisers. The province expressly exempts them from licensing.

What an appraisal is, and who it belongs to
Three different values, and which one the bank uses
Lending value: the number that decides your mortgage
How a low appraisal can raise your down payment
Does the lender always get an appraisal?
Your options when the number comes in low
If your financing condition is still in place
If you have already removed your conditions
Presales: the appraisal happens years after you sign
Why your BC Assessment notice is not the answer
Who regulates appraisers in British Columbia
What to ask your lender, and when
What I could not confirm, and did not print
Questions buyers ask

What an appraisal is, and who it belongs to

An appraisal is a written opinion of value from a trained appraiser. The Appraisal Institute of Canada describes its members as engaged when somebody needs “an expert, unbiased opinion on the value of real estate”. The objective, in the Institute’s own consumer guide, updated January 2018, is “to estimate the price that the subject property would most likely sell for if exposed to the market place”.

So it is an estimate of what the home would sell for, written for somebody who is about to lend money against it. That second half is the part buyers are rarely told.

You may pay for it. You are not entitled to read it.

The Appraisal Institute’s consumer guide is blunt about this. “Often when a report is completed for mortgage lending purposes, the homeowner is required to pay the appraisal fee but the appraiser’s client is the lending institution making a lending decision for the property based on the report.”

And releasing it is not the appraiser’s decision. The same guide: “The AIC member will need written authorization from the lender to release the report to any third party including the person who paid for the report.” Only the client and anyone named in the report as an intended user “are authorized to receive a copy of and rely on the report”.

Nor does federal consumer-protection law fill that gap. On the Financial Consumer Agency of Canada’s own page setting out what a lender must tell you when you apply for a mortgage, the word “appraisal” appears once, and only in the list of charges a lender has to disclose. The page says nothing about receiving the document.

You can still ask. Many lenders will share the report or the headline number, and some will send it on request. The point is that it is a favour, not a right, so plan on the possibility of being told a number without being shown the reasoning.

What this means in practice: ask your lender or broker, before the appraisal is ordered, whether you will be shown the report. Ask it in writing. If the answer is no, you will have to make a decision on a number you cannot inspect, and you should budget your subject-removal time accordingly.

Three different values, and which one the bank uses

Most of the confusion around a low appraisal comes from three numbers being treated as one. They are measured on different dates, by different people, for different purposes.

The number	Who produces it	As at what date	What it is for
The agreed price	You and the seller	The day the contract was accepted	What you are legally bound to pay
The appraised value	An appraiser, for the lender	Usually a date close to the inspection	Deciding how much the lender will advance
The assessed value	BC Assessment	Market value as of 1 July of the previous year	Dividing up property tax

Only the middle one decides your mortgage. The first one decides what you owe. The third one decides your tax bill and nothing else.

A fourth number sometimes enters the conversation and should not: the price a neighbour’s home sold for. It is evidence an appraiser may use, but it is not a value, and a single sale on your street does not move the lender’s number on its own.

Lending value: the number that decides your mortgage

Lenders and mortgage insurers do not work from the purchase price. They work from lending value, and lending value has a definition.

Sagen, one of Canada’s private mortgage insurers, puts the whole rule in one sentence on its real estate underwriting page: “The lending value of the real estate that will be used to calculate the LTV is the lesser of either the market value as determined by an appraisal or the purchase price.”

CMHC says the same thing in its own words, on the page for its Improvement programme: the property value is “based on the lending value as determined by CMHC, which is the lower of the market value or the purchase price and/or cost of construction”.

Read that twice, because it cuts one way only. If the appraisal comes in above your price, nothing improves — the price is still the lower number, so the price is still the lending value. If the appraisal comes in below your price, the appraisal becomes the lending value, and every calculation that follows gets smaller.

That is why a low appraisal is not a negotiating position. It is an input to arithmetic.

CMHC’s own pages disagree about which value it is

This is worth knowing, because it explains why you will get different answers from different people.

On CMHC’s Purchase page, the sentence reads: “Loan-to-value (LTV) ratios measure the ratio of a loan amount to the lending value of the property, expressed as a percentage.” On CMHC’s Home Start page, the same sentence reads: “Loan-to-value (LTV) ratios measure the ratio of a loan amount to the appraised value of the property, expressed as a percentage.”

One word changed, in otherwise identical wording, on two pages of the same programme. Neither page carries a date of any kind, so neither can be shown to be the newer one.

In a case where the appraisal is the lower figure, the two sentences produce the same answer, because the appraised value is the lending value. The difference only bites where the appraisal is higher than the price, and there the “lesser of” rule quoted above governs. But it is a good illustration of why you should ask your own lender what it is using, rather than assume.

There is a second, larger inconsistency in the same place, and it is the one that catches buyers out. See the next section.

How a low appraisal can raise your down payment

Nearly every article on this subject tells you a low appraisal shrinks your loan. Very few mention the second effect, which can cost more.

CMHC states the minimum down payment tiers against lending value, not against the price. On the Purchase page, under minimum equity requirements, for a one- or two-unit home: “5% of the first $500,000 of lending value and 10% of the remainder”. The same page caps insured lending at “Up to 95% LTV” for a one- or two-unit home, and requires that the “purchase price / lending value or as-improved property value must be below $1,500,000 for homeowner loans”.

Now compare CMHC’s page written for consumers. It states the identical rule against a different number: “For a purchase price of $500,000 or less, the minimum down payment is 5%. When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.”

Same rule, two denominators. Buyers are told “purchase price”. Underwriters are told “lending value”. When the appraisal lands below the price, those are not the same number, and it is the underwriter’s version that is applied to your file.

The practical consequence: a low appraisal lowers the ceiling on what you can borrow and is the base from which your minimum contribution is worked out. Your cash shortfall is the gap between the price and the lending value, plus any increase in the minimum the tiers now demand.

Threshold	What it is	What a low appraisal does to it
Maximum insured loan, one- or two-unit home	Up to 95% of lending value	The ceiling drops, because lending value dropped
Minimum down payment, first $500,000 of lending value	5%	Measured on the lower figure, so the tier boundary moves
Minimum down payment, the remainder	10%	Measured on the lower figure
Insured mortgage property value limit	Must be below $1,500,000	Tested on value, so the appraisal decides which side of the line you are on
Maximum amortisation	25 years on the Purchase programme, 30 years on Home Start	Unchanged by the appraisal

The $1,500,000 ceiling deserves a note of its own on the North Shore, where a good number of detached homes sit near that line. It is a cliff, not a slope. A home valued below it can be financed with mortgage loan insurance and a smaller down payment. A home valued at or above it cannot be, whatever your price says. So on a property close to that threshold, the appraisal is not just adjusting your loan — it may be deciding whether your financing structure exists at all.

The $1,500,000 figure and the 30-year amortisation for first-time buyers and buyers of new builds both took effect on 15 December 2024, announced by the Department of Finance Canada.

And the stress test applies to the smaller loan too

For an insured mortgage, CMHC’s Purchase page requires debt service ratios “calculated using an interest rate that is the greater of the contract interest rate plus 2%, or 5.25%“.

For an uninsured mortgage, the test comes from the federal banking regulator. The Office of the Superintendent of Financial Institutions sets the minimum qualifying rate at “The greater of the mortgage contract rate plus 2% or 5.25%“. That page was last modified on 29 January 2026, and it describes both components as “currently set”, reviewed “at least annually” — so treat the figures as current rather than permanent.

One correction worth making, because it is widely repeated: those numbers are not in Guideline B-20 itself. B-20 delegates them, asking only for “the contractual mortgage rate plus a buffer, as set by the Superintendent or the minimum (or ‘floor’) rate, as set by the Superintendent”. The numbers live on the page linked above.

Does the lender always get an appraisal?

No. It is usual on a purchase, but it is not compulsory, and understanding that explains a situation plenty of buyers find baffling — a value coming back low when nobody ever visited the house.

The federal regulator’s guideline for mortgage insurers, Guideline B-21, dated 2019, asks for “a risk-based approach” using “a combination of valuation tools and appraisal processes appropriate to the underlying risk being undertaken (e.g., automated valuation model, review of comparable properties, on-site inspections, drive-by appraisals, progress inspection reports, and/or a full appraisal)”. It adds that an insurer “should not rely exclusively on any single method for property valuation”.

Six methods, with a full appraisal listed last. CMHC’s own guidance for mortgage professionals is in the same register: “A professional appraisal may be required if a more in-depth assessment of the value of your property is needed.”

Method	Does anyone see the home?	What it tends to miss
Automated valuation model	No	Condition, renovations, outlook, anything that makes the home unusual
Review of comparable properties	No	Why your home differs from the homes it is being compared to
Drive-by appraisal	Outside only	Everything behind the front door
On-site inspection	Yes	Less, but it is still an opinion formed in one visit
Progress inspection report	Yes, in stages	Used on construction, not a value on its own
Full appraisal	Yes	The most thorough of the six, and the slowest to arrange

Two things follow for a buyer. First, if the value came from a model rather than a visit, a renovated or unusual home is exactly the kind of property it will get wrong, and that is a reasonable thing to raise with your lender. Second, you cannot assume an appraiser is coming, so do not plan your subject-removal date around a visit that may never be booked.

Where an appraiser does attend, speed matters. CMHC’s guidance notes that it is “important to allow the appraiser access to the property in a timely manner, in order to minimize the time required to obtain financing”. On a short subject period, access delays come straight out of your thinking time.

Your options when the number comes in low

There are only five real moves, and which ones are open to you depends entirely on whether your conditions are still in place.

Option	What it costs you	When it works
Put in more cash to cover the gap	The shortfall, in full, from savings	Always available, if you have the money and still want the home at that price
Ask the lender to look again	Time you may not have	Where there is a factual error, a missed renovation, or the value came from a model rather than a visit
Take the file to a different lender	A fresh application, and possibly a second appraisal fee	Where the first valuation looks like an outlier, and your timeline allows it
Go back to the seller on price	Nothing, but the seller can simply say no	Only realistic while a condition still protects you, and the seller is free to refuse
End the contract under your financing condition	Your time, and the cost of inspections already done	Only while that condition is still in place and you have used reasonable efforts

Notice what is not on that list: making the appraiser change the number. You cannot, and neither can your REALTOR®.

“Reconsideration of value” is not a Canadian right

You will see the phrase “reconsideration of value” used as if it were a formal process you can invoke. In the United States it largely is. In Canada, it is lender vocabulary rather than a published procedure, and I could not find it defined by the Appraisal Institute of Canada, CMHC or any mortgage insurer.

What the Institute does have is a formal appraisal review, carried out by a review appraiser under its practice standards. And it is explicit that its own complaint process is not a route to a different number: the Institute says that process will not “provide an opinion on the final opinion of value”, and anyone wanting one “may wish to engage a review appraiser to perform a technical Appraisal Review”.

So the practical path is through your lender, not around it. Give the lender facts it does not have — a permit for work that was done, a correction to the floor area, sales the appraiser may not have seen — and let the lender decide whether to go back. Arguing about the conclusion itself, without new information, goes nowhere.

If your financing condition is still in place

This is the good case, and it is why a financing condition is worth having even when you are confident about your approval.

The BC Financial Services Authority, the provincial regulator, is clear that a pre-approval is not the end of the matter and that a condition is not a free pass. Its guidance for buyers says a contract “is legally binding as soon as both the buyer and the seller have signed”, that “Subject clauses must be carefully and precisely worded”, that when you place conditions on an offer “you are required to use every reasonable effort to see that the conditions are satisfied”, and that they “are not ‘escape’ clauses that allow you to avoid your legal responsibilities in the contract”.

It also sets out the exit, where the effort has genuinely been made: “If you are unable to meet the conditions after making every reasonable effort to do so, the contract ends and there is no legal obligation to complete the purchase.”

Two things matter for timing. Removal is positive, not passive — the regulator’s wording is that “written notification should be given to the seller that you are removing the subject clauses”. And Peoples Law School, reviewed for legal accuracy in May 2024, notes the mirror image: “If the buyer doesn’t give written notice that they’re removing the subject clauses by the deadline, the contract ends.”

So a financing condition that is still live gives you a decision to make. The thing that destroys that option is removing the condition before the lender has confirmed the actual loan amount — not the pre-approval, the loan on this property.

Peoples Law School puts the pre-approval point plainly: “While ‘pre-approval’ is a good indication that you’ll get the loan you need, it’s not a sure thing.” A pre-approval is about you. The appraisal is about the house.

If you have already removed your conditions

Then the question is no longer whether you can walk away. You are committed to completing, and the problem has become where the money comes from.

Peoples Law School sets out the consequences: if you do not pay what you owe by the completion date, “the seller might cancel the contract and keep your deposit”, “The seller may be able to claim additional damages”, and the seller “could sue them for specific performance of the contract” — a court order to go through with it. It also warns about announcing the problem early: if before completion day “you clearly indicate that you don’t intend to complete the contract, the seller is entitled to treat you as being in default”, which is “an anticipatory breach of contract”. Its advice at that point is that “It’s absolutely critical to ask for legal advice as soon as possible.”

On the deposit, two things are true at once and they answer different questions. Who the money belongs to is decided by your contract and the general law. How it actually gets paid out is decided by the trust rules. On that second point the BC Financial Services Authority’s deposits guidelines, published on 4 May 2021, say a brokerage holds the deposit so that “the funds are held for the benefit of both parties and not for one party or the other”, and that “Should a transaction not complete for any reason, despite what the contract of purchase and sale outlines, you must have all parties to the transaction sign an agreement before the deposit can be released”. If the parties do not agree, “they should seek legal advice”.

There is one carve-out: the same guidelines note an exception where the buyer uses the rescission right under section 42 of the Property Law Act. Deposits have their own article on this site, linked below, and this page does not try to repeat it.

The honest summary: by the time your conditions are gone, a low appraisal is a cash problem with legal consequences, not a contract problem with an exit. Which is the whole argument for not removing a financing condition until the lender has committed to a number on that specific property.

Presales: the appraisal happens years after you sign

On a presale, you agree a price today and the lender values the home at completion, which may be years later. There is no financing condition sitting over that gap.

The BC Financial Services Authority’s consumer guide to presale purchases states the risk in four sentences that are worth reading slowly:

“You may experience issues obtaining financing if your pre-sale unit’s appraised value has decreased upon completion. A lender may appraise your unit at a lower value than what you have agreed to purchase it for. As a result, you may no longer qualify for adequate financing and may need to increase your cash payment to complete your purchase. If you cannot increase your cash payment, you may then be in default of your pre-sale contract and at risk of losing your deposit.”

That is the regulator describing a low appraisal as a default risk, not an inconvenience. It is the sharpest difference between a presale and a resale on this subject.

	Resale	Presale
When the value is set	Within days or weeks of the contract	At completion, possibly years later
Is a financing condition available?	Yes, if you negotiate one	Not over the completion-date valuation
Who carries the gap	You, but usually while a condition still protects you	You, with no condition left to rely on
Cooling-off right	3 business days under the Property Law Act, with a fee	7 days under the Real Estate Development Marketing Act

One widely repeated error is worth correcting here. The 3-business-day home buyer rescission period does not apply to a presale: the Property Law Act says it “does not apply to a contract of purchase and sale to which section 21 of the Real Estate Development Marketing Act applies”, and that Act gives a presale buyer its own right to rescind “within 7 days” after the later of the specified events. Two different regimes, and only one applies to you.

Tom has a fuller page on buying a presale and what an assignment really costs; it is in the Read next list below.

Why your BC Assessment notice is not the answer

Assessment notices land in January, and it is a common assumption that the figure on yours settles the question. It does not, and BC Assessment agrees.

Its page for first-time home buyers states that “Assessments represent the property’s market value as of 1 July each year”, and then sends you elsewhere for anything current: “To determine your home’s current market value at any particular time, it is best to consult a realtor or private appraiser for the actual value in the most current real estate market for your neighbourhood.”

So the number on your notice is a valuation date, not a valuation of today, and it exists to divide up property tax fairly across a municipality. A lender making a decision this month is not going to use a figure dated to a 1 July that may be many months behind.

Which does not make it useless. If your assessment is far above the appraisal, that is a fact worth putting in front of your lender, alongside everything else. It is evidence. It is not an answer.

Who regulates appraisers in British Columbia

This surprises people, so it is worth stating plainly: British Columbia does not license real estate appraisers. It expressly exempts them.

Section 2.8 of the Real Estate Services Regulation is headed “Exemption for appraisers and property inspectors”, and reads: “A person who is providing trading services only by (a) providing an appraisal of value of real estate and consulting services relating to the value of real estate, or (b) inspecting and reporting on the condition of real estate is exempt from the requirement to be licensed under Part 2 of the Act if those services are provided in the course of the person’s business as an appraiser or real estate inspector.” That consolidation is current to 6 October 2026.

The BC Financial Services Authority says the same in a post dated 22 October 2024: “There is an exemption from the requirement to be licensed for persons providing real estate inspection and/or appraisal services.” It adds a detail that runs the other way from what most people assume — the exemption applies “not to those who are already licensed under RESA”. A licensed REALTOR® who wanted to appraise independently would have to give up the licence to do it.

Oversight instead comes from the profession. The Appraisal Institute of Canada grants two designations — “the Accredited Appraiser Canadian Institute (AACI™) and the Canadian Residential Appraiser (CRA™)” — and sets their scope. A CRA is “qualified to undertake any valuation and consulting assignment on dwellings containing not more than four self-contained family housing units or on individual undeveloped residential dwelling sites”. An AACI covers residential and commercial property and more.

Why a buyer should care: your house is almost certainly inside a CRA’s scope, so seeing CRA rather than AACI on the report is normal and is not a reason to doubt it. And it is worth remembering that “unlicensed” here does not mean unqualified — it means the accountability sits with a national professional body and its standards rather than with a provincial regulator.

The federal regulator does set an expectation on lenders about who they use. Guideline B-21 says a mortgage insurer should ensure “that appraisers are designated, licensed or certified, and meet qualification standards”, and that they “should be independent from the mortgage acquisition, loan processing and loan decision process”.

What to ask your lender, and when

Almost all of the pain in a low appraisal comes from finding out late. These questions are free, and they are best asked before you write an offer, not after.

Will you order a full appraisal on this property, or use a valuation model? The answer changes how much a renovation or an unusual layout matters.
Who pays for it, and will I be shown the report? Get the answer in writing before it is ordered.
Are you lending against the purchase price or the lending value? You now know the right answer. Ask anyway, and hear it from them.
How many days from my instruction to a confirmed loan amount on this address? That number, not your optimism, should set your subject-removal date.
If the value comes in below the price, what is your process? Ask whether a second opinion is possible, how long it takes, and who pays.
Does this property sit near the insured-mortgage value ceiling? If the answer is yes, ask what happens on each side of it.

One more, for your own file: write down what you would do if the value came back short by a meaningful amount. Decide it calmly, in advance, rather than in the last afternoon of a subject period.

What I could not confirm, and did not print

Every figure above was checked at the source that owns it, and then checked again in a separate pass. A few things did not survive that, and they are left out on purpose.

Any right to a copy of the appraisal. Most of what you will read online about this is United States law. I could not find a Canadian statute, regulation, regulator guideline or federal consumer-protection page that gives a borrower that right, so this page does not claim one.
Typical appraisal fees. They are quoted by private firms and vary. There is no published or regulated figure, so no figure appears here. Ask your lender what it will cost on your file.
How often appraisals come in below the price. I found no Canadian published rate from a source worth citing. Anyone quoting a percentage should be asked where it comes from.
“Reconsideration of value” as a defined Canadian process. Covered above. Treated as lender vocabulary, not a right.
A BC court decision squarely on a low appraisal and a financing condition. The commentary I could reach was decades old and arose on facts unlike a normal home purchase, so it is not cited here. BC’s public case-law databases were not reachable during this research, and “I could not find one” is not the same as “there is none”.
Any price or market figure. Deliberately none on this page. Market numbers are on the North Shore market statistics page, which is kept current.

Questions buyers ask

Does a low appraisal mean I overpaid?

Not necessarily. An appraisal is one person’s opinion of the most likely selling price, formed from the evidence available on a particular day, and sometimes formed without anyone entering the home. A competitive sale can land above every comparable sale on record and still be a fair price for that home. What a low appraisal reliably tells you is what the lender will advance.

Can I challenge it?

You can give your lender information the appraiser did not have, and the lender can decide whether to act on it. You cannot require a different conclusion, and the Appraisal Institute’s complaint process is not a route to a new number. Where the timeline allows, a second lender is often the faster path than arguing with the first.

Who pays for the appraisal?

It depends on the lender and the product. Some absorb it, some pass it on. The Appraisal Institute’s consumer guide notes that the fee and “identification of the party responsible for making the payment should be negotiated prior to starting the appraisal assignment”, and that homeowners “should ask their lending institution if an appraisal has or will be conducted and what the appraisal fee will be”. Ask before it is ordered.

If the appraisal comes in high, can I borrow more?

Not on this purchase. Lending value is the lower of value and price, so a high appraisal leaves your price as the governing number. It may matter later, for refinancing or for removing mortgage insurance, but it does not increase the loan on the purchase itself.

Does the appraisal check the condition of the house?

No. It is an opinion of value for a lender, not an inspection for you. They are different jobs, with different reports, and an appraisal is not a substitute for a home inspection. There is a separate article on this site about what a home inspection misses on the North Shore.

Can I avoid the problem by not having a financing condition?

That removes your protection, not the risk. The BC Financial Services Authority notes that “Some buyers may choose to put in a subject-free offer to make it more appealing, but that comes with several risks”. Going subject-free means the valuation still happens; you simply have no way out if it disappoints.

How long does an appraisal take?

There is no published standard, and it depends on the method, the appraiser’s workload and how quickly the appraiser can get in. That is exactly why the question to your lender is “how many days until you can confirm the loan amount on this address”, and why access should be arranged the day it is requested.

Thinking about buying or selling on the North Shore?

Leave your name and number and I will come back to you, usually the same day. Tell me the address if you have one and I will pull the sale history and the documents that matter before we talk. No charge, no obligation.

Prefer to talk now? Call or text 778-903-7306.

If the Appraisal Comes In Low: What Happens to Your Mortgage in BC

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