In 2026, low appraisals have become one of the top reasons mortgages fall apart in Ontario, even for borrowers with solid income, strong credit, and years of homeownership. Buyers are qualifying — but values aren’t keeping up with bank lending rules.
Here’s what’s really happening, why banks are pulling back, and how Toronto homeowners are still moving forward.
Why Appraisals Are Coming in Low Across Toronto
This isn’t a pricing crash — it’s a valuation problem.
Banks rely on conservative appraisal models that:
use backward-looking comparables
ignore renovations and upgrades
penalize condos, mixed-use homes, and infill properties
apply stricter risk adjustments in urban markets
As a result, appraisals are coming in tens or even hundreds of thousands lower than expected.
How a Low Appraisal Kills a Mortgage Deal
When an appraisal comes in low, the bank doesn’t renegotiate — it recalculates.
That can mean:
a reduced mortgage amount
higher required down payment
failed refinance due to LTV limits
deals collapsing days before closing
For refinances, this is even worse. Many homeowners discover they can’t access equity they’ve built over years because the appraisal no longer supports the loan.
Why This Is Worse in 2026 Than Ever Before
Banks in 2026 are:
limiting exposure in urban condos
tightening internal risk thresholds
removing discretion from underwriters
prioritizing “perfect” files only
Even small appraisal gaps now result in full declines — something that rarely happened in prior years.
Refinance Appraisal Issues Are Surging in Ontario
Refinances are being hit hardest.
Homeowners looking to:
consolidate debt
fund renovations
access business capital
manage cash flow
are finding that bank refinance appraisals no longer reflect real market demand.
This leaves borrowers asset-rich but cash-constrained.
How Toronto Homeowners Are Still Closing Despite Low Appraisals
Equity-Based Private Lending
Private lenders assess:
true property value
loan-to-value (LTV), not arbitrary thresholds
exit strategy and timeline
This allows deals to move forward when bank appraisals stall progress.
Short-Term Structures That Protect the Exit
Most borrowers don’t replace the bank permanently. Private mortgages are often used to:
complete a purchase
bridge timing gaps
finish renovations
refinance later under better conditions
When a Private Lender in Toronto Makes Sense
A private mortgage may be appropriate if:
your appraisal came in low
your refinance was declined
your closing is approaching
your lender keeps re-reviewing conditions
Speed and flexibility matter more than rate when deals are at risk.
How Lendworth Helps When Appraisals Fall Short
Lendworth works with Toronto and GTA homeowners facing low appraisal mortgage issues by focusing on:
equity-first underwriting
realistic valuations
time-sensitive closings
structured exit planning
If your appraisal killed your bank mortgage, there may still be a path forward.
👉 Apply or speak with a lender:
https://www.lendworth.ca/borrow
Final Thought
Low appraisals aren’t about your property failing — they’re about banks changing how they lend.
In 2026, understanding valuation risk is just as important as credit and income.