What market value means in a Canadian mortgage context and why it should not be confused with tax assessment or simple asking price.
Market value is the estimated price a property would likely achieve in an open and competitive market under normal conditions.
Market value sits behind many mortgage conversations, even when the lender talks instead about appraised value. Borrowers often use “market value” loosely, but the concept matters because it informs how much lending the property can support.
An appraiser forms a value opinion using market evidence, often including comparable sales. Market value is not simply whatever a seller hopes to get or whatever a municipality uses for property-tax purposes.
In refinance and home-equity conversations, market value becomes especially important because the lender is not working from a fresh purchase contract and therefore leans more heavily on valuation evidence.
A homeowner believes the property is worth $1.1 million because a neighbour listed at that price. The lender still wants evidence that the property’s market value supports that figure before approving a larger refinance or HELOC.
Market value is not the same as assessed value.
It is also not simply the current listing price or the owner’s target price. Market value is an evidence-based estimate of likely sale price under normal conditions.
Market value moves with local conditions, property changes, financing conditions, and comparable-sale evidence. In fast-moving markets, yesterday’s assumptions can become stale quickly.