First property as equity/collateral for the bank for the second property?

How useful and feasible is it to additionally use a primary property as equity or collateral for the bank for a second loan or second property (single-family house + building plot)?
Does the bank count this as cash equity for the loan conditions?
I thought that as the borrower I am liable with my entire assets anyway, so in case of payment default on the second loan, the bank can also take the primary property from me.

A few current figures on the primary property:
Market value €200k - 20-30% (risk factor that banks always calculate) - remaining debt €70k = €130k - 30% = approx. €90k equity
I could now agree with the bank to use the approx. €90k as equity for another loan.
If it is the same bank for both loans, it should be even easier / more sensible?

I would be very happy to receive your feedback.

Jan

For me, the collateral has led to better terms. However, the bank has to assess whether and how they see it. As far as I know, the collateral does not serve as equity but only as security for the bank and thus better loan terms. You can have that calculated. If there is no big difference, I would rather do without it. Because additional costs (notary, appraisal, land register, etc.) will be incurred. Furthermore, in my opinion, it would be better if the house could possibly be sold later without a mortgage. Good luck!

Does the bank count these credit conditions as cash equity?
I thought, as a borrower, I am liable anyway with all my assets, so in case of default on the second loan, the bank can also take the first property from me.

You are mixing something up.
Of course, you are liable for the loan with everything you have. I think that is undisputed.
The difference is: if the bank is listed in the land register of both properties, then the bank can initiate a foreclosure of both(!) properties much more easily and directly, which it can otherwise only do for one property. Exactly where the bank is listed in the land register.
What you cannot do is to include these €90,000 as equity in a financing, because you do not have this €90,000 in cash. You cannot pay an invoice from this money or spend it in any other way. Therefore, your term "cash equity" is nonsense.
So yes, in summary, it is as Xingwei421 says: the interest rate will be somewhat cheaper because the risk for the bank is lower, as in the event of default, it has access to both properties. Nothing more and nothing less.

Thank you for your feedback. Everything is correct. However, it is more important to have cash equity (currently we have about €40) as a security buffer for everyday life just in case, rather than using everything for the financing of the second property. Of course, as you write, everything would need to be calculated. But it is better to have a security buffer for everyday life than to put everything into the property.

Hello, only if the bank can also register a mortgage. Since it would be subordinated, it is rather unlikely that it will lead to better conditions.

With additional securities, banks work with many discounts.

So, assuming the bank determines:
Market value: 200,000 EUR
then lending value: 160,000 EUR
then many banks take another step and say: for additional security, I only use 80-85% of the lending value, in this example therefore: 128,000 to 136,000 EUR
if you still have a prior charge of 70,000 EUR, then as additional security only 58,000 to 66,000 EUR remains

but depending on the credit requirement, it can already lead to a good improvement in conditions. Of course, if you do not have free land charges, you still have to register this additionally here = again notary/court costs, which should then be offset.