The replacement cost of a property is determined by the bank’s appraiser for mortgage purposes and refers to the price at which a comparable property could be built or purchased at the time the property is appraised.

What are the property values and prices?
When you apply for a mortgage loan, you are likely to encounter the following terms in addition to the property appraisal:
- The starting price, which corresponds to the cost price.
- The cost of the property, i.e. the price at which you could have bought the property when it was built, without deducting wear and tear.
- The reproduction price of the property, which is the price at which you could have bought a comparable property at the time of valuation.
- However, the time value, which is based on the replacement cost, is reduced by wear and tear and the cost of repairing major defects.
- Income price
- The market value, otherwise known as the current price, of a property is the price at which the property could be sold on the valuation date. It is influenced by physical phenomena as well as location, size, zoning and other factors.
Did you know that the property must also be insured for the replacement cost? The policy is then canceled for the benefit of the bank.