Collateral value is a technical term used by the banking sector. Banks are no longer permitted to lend amounts equivalent to the sales price but, with effect from 2013, must assess the value of a property based on lowest price methodology and underwrite any financing on the basis of the bank's appraisal. Subject to type of property, price and creditworthiness of the buyer, banks may offer mortgages of between 50-80% of the collateral value. In the event that the purchase price is higher than the collateral value, the buyer is obliged to settle the difference with his own means.

Further information: