The Mortgage Lending Value. Conservatively Valued.

The mortgage lending value is the absolute limit up to which a bank is allowed to grant loans in accordance with internal and legal regulations.

Mortgage Lending Value. A Definition.

In § 3 (1), the Mortgage Lending Value Regulation defines the mortgage lending value as the value of a property, “which, based on experience, may throughout the life of the loan be generated in the event of sale, notwithstanding temporary fluctuations in value in the relevant property market, which could be due to cyclical movements, and excluding speculative elements”.

The Regulation on the Determination of the Mortgage Lending Value. 

The determination of the mortgage lending value is regulated by the provisions of the German Pfandbrief Act and the Regulation on the Determination of the Mortgage Lending Value. It is a very conservative valuation, aiming to determine the long-term lower limit of the property’s value.

Amount of the Mortgage Lending Value. Conservatively Valued.

Source: WL BANK

This is reflected, among other things, in the fact that the amount of the mortgage lending value corresponds to approximately 85% of the market value. On the basis of this conservative valuation and the 60% limit of the mortgage lending value, the collaterals are included in WL BANK’s cover pool at approximately 51% of the property’s market value.