What is the mortgage value?
The mortgage value is the value of the property set by means of an appraisal carried out by an accredited company. It may be different from the purchase-sale value. The mortgage value is the reference value used when applying for and arranging the mortgage and it constitutes the Bank's guarantee. The mortgage value will determine how much the Bank will lend for the transaction.
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Here's an example
The property you want to buy has a sale price of €300,000 and you want to apply for 80% of that amount to finance your purchase. The Bank will calculate 80% of the appraisal value, i.e. of the mortgage value and not the sale price. The mortgage value be more or less than the sale value, i.e. more or less than €300,000.
The mortgage value, or appraisal value, is intended to be an objective, non-speculative value that takes into account different factors such as the free of speculation in which different factors are taken into account such as the rateable value, local amenities, property prices in the same area, etc.