Glossary · Buy

Lending value

The value a bank assigns to a property in order to calculate the amount of financing it is prepared to grant. It is determined by the bank according to its own valuation criteria and does not necessarily match the price agreed between the buyer and the seller. When the purchase price exceeds the lending value, the difference must generally be covered in full by equity that does not come from the second pillar. In a tight market such as Geneva's, where achieved prices sometimes differ significantly from bank valuations, this gap is one of the main reasons a financing application fails. The lending value is also the basis for calculating the loan-to-value ratio and the minimum share of equity required.