Appraisals in a shifting market: how much cushion your plan needs
When prices move fast, appraisals lag and lenders get careful: OSFI's B-20 names markets with rapid price increases as higher-risk, calling for more thorough valuation. In a falling market, recent sales pull appraisals down before online estimates catch up. Build your plan so it still works if the appraisal comes in 5–10% below your figure.
Rising markets
Lenders' appraisers anchor on sold prices; listing prices and bidding wars run ahead. OSFI expects more thorough valuation where prices rise rapidly.
Falling markets
The most recent sales set the tone, and online estimates may still show last season's prices. Refinance early or borrow less.
Sizing the cushion
| Appraisal | Refinance | HELOC |
|---|---|---|
| As hoped ($900,000) | $218,000 | $218,350 |
| -5% ($855,000) | $182,000 | $182,350 |
| -10% ($810,000) | $146,000 | $146,350 |
| -15% ($765,000) | $110,000 | $110,350 |
Value needed for $150,000: $815,000 (refinance), $814,563 (HELOC).
Frequently asked questions
Do appraisals lag the market?
They rely on recent sold prices, so in a fast market they reflect the last few months, not today's listings.
Primary sources
- OSFI — Guideline B-20: Residential mortgage underwriting (HELOC 65%, appraisals, AVMs) (effective October 31, 2017). Checked .
- Appraisal Institute of Canada — What appraisers do (AACI, CRA designations; three approaches). Checked .