The collateral value or Beleihungswert represents the value that you can achieve when selling your property, at any time. This is estimated by the bank. The collateral value is based on the purchase value, but takes into account a possible safety discounts. Such discounts differ by bank. Therefore the actual interest rate a bank may offer to you may differ form the rate you might think would apply to you. More importantly, it may mean you need more money for a downpayment. An early consultation with your trusted mortgage advisor can save you many disappointments.
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