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Spanish lender offers 113% mortgages

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
23/03/2015

A leading bank in Spain has started to offer mortgages at more than 100% loan-to-value.

Banco Popular – Spain’s fourth biggest bank – is offering mortgages to borrowers who put down no deposit on a property.

The Telegraph reports that the bank is trying to sell repossessed apartments and will offer 13% ‘cashback’ on the purchase price.

Loans worth more than 100% of a property’s value were one of the major reasons for the financial crisis in the UK as borrowers took out mortgages they could never hope to pay back and gambled on rising property prices.

When the market slumped many of these borrowers were left unable to service their loans at all.

Today, only some specialist lenders offer 100% loan-to-value mortgages, often requiring you to place savings into an offset account.

The mortgage on offer in Spain tracks the Euribor rate plus 0.9% during its first year before rising to Euribor plus 2.39%, the report said.

However, the loans are restricted to repossessed properties which are now owned by the bank.

The Your Mortgage Spanish property guide offers a range of tips for those looking to invest in the country. Clare Nessling of overseas mortgage firm Conti said people were starting to view Spain as a viable investment once more.

“If people enjoy what Spain has to offer, property can be snapped up there on better terms than have been seen for years,” she said.

“As long as you treat your property purchase as an investment over the long term, you can still buy with confidence, if you buy wisely.”


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