What Do Private Lenders Look for in an Ontario Mortgage Appraisal?

Short answer: private lenders in Toronto, Hamilton and across Ontario usually lend based mainly on the property, so the appraisal carries a lot of weight. They want a credible, independent value, a clear picture of the home's condition and confidence that it could be sold if needed.

Why Do Private Lenders Rely So Much on the Appraisal?

Banks look closely at income, credit and debt ratios. Private lenders, including individuals, mortgage investment corporations and syndicated lenders arranged through brokers, often step in when a borrower doesn't fit those rules. Because they rely less on the borrower's profile, the property itself is their main protection. If the loan goes wrong, the home is what secures their money.

What Do Private Lenders Look for in an Appraisal?

• A supported current value. Recent comparable sales, properly adjusted, not an optimistic guess.
• Marketability. How easily the property would sell and roughly how long it might take.
• Condition. Deferred maintenance, needed repairs or unfinished renovations.
• Legal use. Whether extra units appear to be permitted, and how the property is zoned.
• Anything unusual. Odd lots, environmental concerns or features that narrow the pool of buyers.

Lenders also look at the appraiser. A designated appraiser with local experience, who signs the report and stands behind it, gives a lender far more comfort than an unsigned estimate or a price opinion from someone tied to the deal.

A report that flags these honestly is more useful to a lender than one that only gives a number.

How Does the Value Affect How Much You Can Borrow?

Private lenders set their own loan-to-value (LTV) limits, and they are often more conservative than the limits banks use for insured or conventional mortgages, especially for second mortgages or unusual properties. The appraised value is the starting point for that calculation. For how LTV works in general, see refinancing in Ontario. Keep in mind that a private mortgage is usually a short-term arrangement, and the lender is thinking about what the property would fetch if it had to be sold. That is why a realistic value helps everyone, including you: borrowing against an inflated number can leave little room later. Your mortgage broker can explain the terms a particular lender offers.

Will a Private Lender Accept Your Appraisal?

Private lending moves quickly, and an appraisal you already have can sometimes speed things up. Even so, requirements vary from lender to lender.

One important point: many lenders only accept appraisals ordered through them or from appraisers on their approved list, and some need the report addressed to them. Check with your lender or mortgage broker before you book, so you do not pay for a report they cannot use.

Lenders also generally want a recent report, so an older appraisal may not be accepted.

How Much Does a Private Mortgage Appraisal Cost?

At Best Home Value, appraisals start at $370 for a condo or townhouse, $475 for a detached or semi-detached house and $700 for a 2-4 unit property in the Greater Toronto and Hamilton Area. Your exact fee is confirmed in writing within one business day, before anything is booked. See our full fee table.

How long does it take?

The signed PDF is typically delivered 2–3 business days after the inspection, prepared by a designated appraiser to the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP). Learn more about our purchase and refinance appraisal service.

How Can You Prepare for a Private Mortgage Appraisal?

• The lender or broker's name and any report requirements
• A list of recent renovations and any permits
• Leases and rents for any rental units
• Access to every part of the property, including the basement and any rental units

Related Articles

• Refinancing in Ontario: how the appraisal affects your loan
• Should I get an appraisal before buying a home?
• Appraisal vs. an agent's price opinion: what's the difference?

This article is general information, not tax, legal or financial advice. Please speak with your accountant, lawyer or lender about your situation.