# How does property valuation affect my mortgage approval when using a gifted down payment?

> Property valuation plays a key role in determining the loan-to-value (LTV) ratio, a critical factor in mortgage approval.

Category: Purchasing
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/purchasing/how-does-property-valuation-affect-my-mortgage-approval-when-using-a-gifted-down-payment

## Answer
Property valuation plays a key role in determining the loan-to-value (LTV) ratio, a critical factor in mortgage approval. Lenders meticulously assess and adjust the property value, considering a range of factors, including location, property type, prevailing market price trends, and overall housing market conditions. In markets experiencing rapid price appreciation, lenders adopt more conservative valuation methodologies. This involves evaluating the property's intended use, current price, price trends, and the broader housing market context.

## Institutional highlights
- Your down payment gift impacts how much you can borrow, based on the home's value.
- Lenders look at things that could affect your home's value, like market conditions.
- If home prices are rising quickly, lenders might be extra careful when estimating your home's value.
- Lenders can adjust the home's value when deciding how much they'll lend you.
- Lenders must be upfront about how they determine your home's value for your mortgage.

## Related guide
- https://ratellow.com/guides/gifted-down-payment-rules

## Sources
- Property value used for the LTV ratio — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- IV. Other guidance — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#4.0