Estonia's Ministry of Finance has published draft changes to mortgage refinancing rules that would allow banks, in certain cases, to assess the value of residential property collateral without commissioning an on-site inspection and a full valuation report. Under the proposal, a bank could decide whether an on-site visit and valuation report are necessary or whether the valuation can be performed using an automated valuation model based on statistical data. Use of automated models would be limited to properties and regions where suitable underlying data and sufficient market information exist to produce reliable results, and real estate agencies could also use such models. Banks would need detailed internal rules setting out when an on-site inspection can be replaced and how valuation quality is ensured. The changes also allow a valuation report to be prepared in a simplified form in certain cases, such as where a more comprehensive valuation was carried out recently. Banks must align their practices with the new requirements by the beginning of 2027, with the option to adopt the new approaches earlier.
Ministry of Finance (Estonia) 2026-03-04
Estonia's Ministry of Finance proposes more flexible collateral valuation rules for mortgage refinancing
Estonia's Ministry of Finance proposes allowing banks to use automated valuation models for mortgage refinancing in areas with adequate data, replacing on-site inspections and full reports. Banks must establish internal rules for valuation quality. Simplified reports are permitted if a comprehensive valuation was recently conducted.