# How does a low appraisal affect my loan-to-value (LTV) ratio and down payment?

> A lower appraisal increases your LTV ratio, potentially requiring a larger down payment.

Category: Purchasing
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/purchasing/how-does-a-low-appraisal-affect-my-loan-to-value-ltv-ratio-and-down-payment

## Answer
A lower appraisal increases your LTV ratio, potentially requiring a larger down payment. Your LTV ratio is your mortgage amount divided by the appraised property value. FRFIs adjust property value for LTV calculations and use conservative approaches in rapidly increasing markets.

## Institutional highlights
- Your lender looks at location, property type, and current market to determine your home's value for your mortgage.
- If home prices are rising quickly in your area, your lender might use a more careful estimate of your home's value.
- Your down payment needs to come from your own savings to ensure you can afford your mortgage.

## Related guide
- https://ratellow.com/guides/dealing-with-low-appraisals

## Sources
- Property appraisals — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.4.2
- Property value used for the LTV ratio — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026