While banks at home are avoiding the lending excesses of the past – such as the notorious 100pc-plus loans that helped bring down Northern Rock – other European lenders are following a different tack.
In a bid to shift repossessed newbuild apartments, Spanish lender Banco Popular is offering a zero-deposit mortgage that also gives “cashback” to buyers up to 13pc of the property’s value.
In other words, a mortgage of up to 113pc of the property price.
Properties are available across the country. An apartment complex in Costa del Sol, for example, is being sold off piecemeal, including a £68,000 two-bedroom flat and £172,000 four‑bedroom penthouse.
The 113pc loan-to-value mortgage therefore reportedly lends an extra £22,360 on the four-bedroom penthouse without asking for a penny in equity.
The mortgage tracks European interbank rate “Euribor” plus 0.9pc for the first year, rising to 2.39pc plus Euribor afterwards.
By comparison, most Spanish mortgages tend to require a minimum 30pc deposit and interest rates start from 2pc above Euribor.
Unlike mainstream mortgages, these loans only apply to particular homes. Buyers can choose from a handful of Spanish apartments – all of which have been repossessed from bankrupt property developers and are now owned by the bank.