Market and mortgage lending value appraisals in accordance with § 16 PfandBG

Mortgage lending value appraisal according to § 16 PfandBG - basis for sustainable real estate valuation

A mortgage lending value appraisal in accordance with § 16 PfandBG (Pfandbrief Act) is a central component of real estate valuation in the context of lending. It serves credit institutions as an objective basis for determining the long-term realizable value of a property, irrespective of short-term market fluctuations. The mortgage lending value is therefore a security-oriented valuation parameter that is of crucial importance for mortgage banks and Pfandbrief issues in particular.

Legal basis according to § 16 PfandBG

According to Section 16 of the German Pfandbrief Act (PfandBG), only values that reflect the long-term and sustainable income or utility value of a property may be used as a basis for lending. The mortgage lending value may not exceed the market value (market value) and must be determined in such a way that no losses are to be expected for the lender even in unfavorable market conditions. The value is determined in accordance with clearly defined legal and regulatory requirements, which are specified in the BelWertV (Beleihungswertermittlungsverordnung).

Aim and significance of a mortgage lending value appraisal

A mortgage lending value appraisal serves to minimize risk for banks and ensures that loans are based on a solid and realistic assessment of value. Unlike the market value, which is subject to current fluctuations in supply and demand, the mortgage lending value only takes into account sustainable and long-term factors such as location quality, building condition, potential uses and income stability. This ensures that the property acts as valuable collateral over the entire term of the loan.

Preparation by qualified experts

The preparation of a mortgage lending value appraisal in accordance with § 16 PfandBG is carried out exclusively by certified and independent experts who have in-depth knowledge in the field of real estate valuation. They apply recognized methods such as the income capitalization approach, asset value approach or comparative value approach, depending on the type and use of the property. Not only market analyses, but also technical and legal aspects such as building law, maintenance status and rental agreements are carefully examined.

Significance for banks and property owners

For credit institutions, the mortgage lending value appraisal forms the basis for determining the lending limit, which in turn determines the amount of the possible loan. Property owners also benefit from a transparent and comprehensible valuation, which creates confidence when making financing and investment decisions. A correctly prepared mortgage lending value appraisal in accordance with § 16 PfandBG thus offers legal certainty, transparency and a reliable basis for long-term real estate financing.