Mortgage Blog
Canada's Mortgage Experts
How Appraised Value Affects Your Mortgage
April 21, 2025 | Posted by: Cecile Morell
Understanding Loan-to-Value (LTV)
Loan-to-Value (LTV) is the ratio between your mortgage amount and the appraised value of your home. It’s calculated like this:
LTV = (Mortgage Amount ÷ Appraised Value) × 100%
For example:
You’re buying a home for $500,000 with a $100,000 down payment.
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Mortgage = $400,000
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Appraised Value = $500,000
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LTV = 80% ($400,000 ÷ $500,000)
But if the appraisal comes in lower, say $480,000:
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LTV = 83% ($400,000 ÷ $480,000)
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This could impact your approval, rate, or require mortgage default insurance.
As a licensed mortgage agent in Ontario and Manitoba, I regularly help clients assess their LTV to avoid surprises.
What Happens If the Appraisal Comes in Low?
If the appraised value is lower than your purchase price, your lender will go with the lower number. That means:
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You may need a larger down payment to make up the difference
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Your LTV may increase, possibly requiring CMHC, Sagen, or Canada Guaranty insurance
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You might need to renegotiate the purchase price
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In some cases, a second appraisal or lender reassessment could be helpful
This is where having The Mortgage Boss® in your corner matters. I’ll walk you through your options and help you protect your financing plan.
How to Prepare for a Smooth Appraisal
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✅ Work with a real estate agent who knows the local market and prices strategically
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✅ Keep your home clean and well-maintained (especially for refinances)
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✅ Choose a mortgage broker (hi!) who knows how to navigate appraisal-related hiccups
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✅ Have a backup plan in case of a lower-than-expected value
Why This Matters for Your Mortgage Strategy
Your Loan-to-Value ratio can affect:
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Your interest rate
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Whether mortgage default insurance is required
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How much equity you can access when refinancing
Appraisals and LTV aren’t just technicalities—they shape your financial future. As The Mortgage Boss®, I’m here to make sure you understand every piece of the puzzle so you can make confident decisions.
Let’s Chat
Whether you're buying in Ontario, refinancing in Manitoba, or anywhere else in Canada, I’ll help you build a mortgage plan that works.
Book a free consultation with The Mortgage Boss® today.
