Financial and estimating indicators for assessment of mortgage lending value

Abstract

The article proposes a calculation criteria for the determination of the mortgage lending value which originates from the application of the financial method (direct capitalisation), by adopting a capitalisation rate calculated by means of the Debt Coverage Ratio (DCR), taking into consideration the criteria set out by the mortgage lending value, that is (i) prudent appreciation of the future marketability, (ii) normal and local market conditions, (iii) current use and (iv) long-term sustainability of the property.