# Mortgage Value > Mortgage Value means the lesser between the maximum secured amount and the appraised property value. **Term:** Mortgage Value **Last updated:** 2026-07-29 ## Definition ## What Mortgage Value Means in a Contract Mortgage Value is the benchmark figure a contract uses to describe how much of a property's worth is committed to securing a loan or obligation. Rather than referring simply to a purchase price or an outstanding balance, it captures whichever is lower: the maximum amount the mortgage instrument secures, or the appraised value of the property at a given point in time. This dual reference protects lenders from over-extending credit against an asset that may not actually be worth the full secured amount. Contracts use this concept to set boundaries. A lender cannot rely on a property's aspirational or future value; instead, the contract ties security to a defensible, often independently verified figure. Borrowers, in turn, benefit from clarity about how much of their equity is genuinely encumbered, which matters when planning refinancing, selling, or taking on additional secured debt. ## How Mortgage Value Is Defined or Measured Most agreements define Mortgage Value by cross-referencing two inputs: the maximum principal amount stated in the mortgage instrument and a current appraisal or valuation report. The clause typically instructs that whichever figure is smaller controls, which prevents a scenario where the secured amount is artificially inflated relative to the collateral's real worth. Valuation methods vary and are usually specified elsewhere in the agreement or by reference to industry-standard appraisal practices. Some contracts require periodic revaluation, particularly for long-term facilities or where the property is subject to market fluctuation. Others fix the appraised value at closing and only revisit it upon specific triggering events, such as default, refinancing, or a request from either party. - Maximum secured amount as stated in the mortgage document or facility agreement. - Appraised value from a qualified valuer at the relevant measurement date. - Any adjustments for improvements, damage, or market shifts noted in supplementary schedules. ## Where Mortgage Value Appears in Agreements The term shows up most commonly in a