When loans are funded by the issuance of SDOs and SDROs, valuations are based on the property's open market value. When loans are funded by ROs, valuations are based on the mortgageable value. In Denmark, the mortgageable value will correspond to the open market value in the vast majority of cases, cf sections 10-15 of the Mortgage Act.
LTV limits - an overview
|Covered mortgage bond
|80% or 75 (1)||80% or 75% (1)||80%|
|Agricultural property||60% (2)||60% (2)||70%|
|Commercial property||60% (2)||60% (2)||60%|
1) 80% for loans issued with up to 30 years maturity and 10 years interest-only period and 75% for loans with an unlimited maturity and interest-only period.
2) The LTV can be raised to 70% if the bank adds additional collateral.
Source: ECBC 2015