While still very rare in the UK, several years after the onset of the ‘credit crunch’, 100% mortgages are slowly becoming more commonplace in the Spanish property market and Banco Popular has just announced another.
The proliferation of no-deposit lending products is one of the factors blamed for the onset of the financial crash which began in the US.
Now Spain’s fifth largest bank has introduced its own 100% home loan and is also heavily discounting the initial interest rate. The interest rate for the first 12 months of the loan is 0.9%, teh same as the ‘interbank’ rate, which banks use to lend to each other. Thereafter, the rate increases to 2.39%.
The bank is only allowing the new terms to particular properties, specifically apartments and houses that have been repossessed by the bank, and that are proving difficult to sell due to oversupply.