What Does OMV Mean In Property Finance?

OMV is an abbreviation often used in property finance, the acronym stands for “Open Market Value“.

The term OMV is often used when referring to the value of a property for BTL Mortgages and Bridging Loans.

The purchase price and Open Market Value (OMV) may not be the same. For a variety of reasons, a vendor may sell a property at below market value.

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Most lenders will only lend against the purchase price.

However some Bridging Loan lenders might lend against the Open Market Value, rather than the purchase price.

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Why Open Market Value Matters When You Are Borrowing

Open market value is only one of several figures a valuer produces, and it is rarely the one a lender sizes the loan against. A bridging valuation will normally also state a 180 day value, and sometimes a forced sale value, both lower than OMV. Most bridging lenders apply their loan to value to the lower figure, so a 70% advance quoted against OMV can be meaningfully less cash in practice.

The gap is widest on unusual property, where a quick sale is harder and the discount to open market value is larger. Standard residential and well located commercial shows the narrowest gap. Always ask which figure the lender is applying before you rely on the headline percentage, because the loan to value and the valuation basis only mean anything as a pair.

If you are raising finance against a property, our bridging loan broker service and our commercial mortgage broker service both set out the loan to value bands lenders actually work to.

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