Version status: Applicable | Document consolidation status: Updated to reflect all known changes
Version date: 1 January 2014 - 25 June 2021
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Article 402 Exposures arising from mortgage lending

1. For the calculation of exposure values for the purposes of Article 395, an institution may reduce the value of an exposure or any part of an exposure fully secured by immovable property in accordance with Article 125(1) by the pledged amount of the market or mortgage lending value of the immovable property concerned but not more than 50 % of the market or 60 % of the mortgage lending value in those Member States that have laid down rigorous criteria for the assessment of the mortgage lending value in statutory or regulatory provisions, if all of the following conditions are met:

(a) the competent authorities of the Member States have not set a higher risk weight than 35 % for exposures or parts of exposures secured by residential property in accordance with Article 124(2);

(b) the exposure or part of the exposure is fully secured by:

(i) mortgages on residential property; or

(ii) a residential property in a leasing transaction under which the lessor retains full ownership of the res