in force 2025-01-01 MODIFIED+123 −640§
Amended by Regulation (EU) 2024/1623 32024R1623 · Regulation (EU) 2024/2987 32024R2987 · Regulation (EU) 2024/2795 32024R2795
applies from: unchanged
For residential property exposures, the deduction cap changed from a tiered 50% of market value or 60% of mortgage lending value to a single 55% of the property value, the requirement that the exposure be 'fully secured' was replaced with 'secured', and the risk-weight ceiling condition changed from not more than 35% under Article 124(2) to not more than 20% under Article 124(9).
For commercial immovable property exposures, the deduction cap similarly changed from 50% of market value or 60% of mortgage lending value to a flat 55% of the property value, the 'fully secured' wording was changed to 'secured', and the risk-weight condition moved from not more than 50% under Article 124(2) to not more than 60% under Article 124(9), while the cross-reference in point (c) changed from point (a) of Article 126(2) to Article 124(3), point (c).
Cited: Art. 402, v1 · Art. 402, v2
text before / after
02013R0575-20240709 → 02013R0575-20250101
Article 402
Exposures arising from mortgage lending
1. For the calculation of exposure values for the purposes of Article 395, institutions may, except where prohibited by applicable national law, reduce the value of an exposure or any part of an exposure that is fully secured by residential property in accordance with Article 125(1) by the pledged amount of the market value or mortgage lending value of the property concerned, value, but by not more than 50 55 % of the market value 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, property value, provided that all of the following conditions are met:
(a) the competent authorities of the Member States have not set a risk weight higher than 35 20 % for exposures or parts of exposures secured by residential property in accordance with Article 124(2); 124(9);
(b) the exposure or part of the exposure is fully secured by any of the following:
(i) one or more mortgages on residential property; or
(ii) a residential property in a leasing transaction under which the lessor retains full ownership of the residential property and the lessee has not yet exercised his or her option to purchase;
(c) the requirements laid down in Article 208 and Article 229(1) are met.
2. For the calculation of exposure values for the purposes of Article 395, an institution institutions may, except where prohibited by applicable national law, reduce the value of an exposure or any part of an exposure that is fully secured by commercial immovable property in accordance with Article 126(1) by the pledged amount of the market value or mortgage lending value property value, but by not more than 55 % of the property concerned, but not by more than 50 % of the market value 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, value, provided that all of the following conditions are met:
(a) the competent authorities of the Member States have not set a risk weight higher than 50 60 % for exposures or parts of exposures secured by commercial immovable property in accordance with Article 124(2); 124(9);
(b) the exposure is fully secured by any of the following:
(i) one or more mortgages on offices or other commercial premises; or
(ii) one or more offices or other commercial premises and the exposures related to property leasing transactions;
(c) the requirements in Article 124(3), point (a) of Article 126(2) (c), and in Article 208 and Article 229(1) are met;
(d) the commercial immovable property is fully constructed.
3. An institution may treat an exposure to a counterparty that results from a reverse repurchase agreement under which the institution has purchased from the counterparty non-accessory independent mortgage liens on immovable property of third parties as a number of individual exposures to each of those third parties, provided that all of the following conditions are met:
(a) the counterparty is an institution or an investment firm;
(b) the exposure is fully secured by liens on the immovable property of those third parties that have been purchased by the institution and the institution is able to exercise those liens;
(c) the institution has ensured that the requirements in Article 208 and Article 229(1) are met;
(d) the institution becomes beneficiary of the claims that the counterparty has against the third parties in the event of default, insolvency or liquidation of the counterparty;
(e) the institution reports to the competent authorities in accordance with Article 394 the total amount of exposures to each other institution or investment firm that are treated in accordance with this paragraph.
For these purposes, the institution shall assume that it has an exposure to each of those third parties for the amount of the claim that the counterparty has on the third party instead of the corresponding amount of the exposure to the counterparty. The remainder of the exposure to the counter party, if any, shall continue to be treated as an exposure to the counter party.