Spanish bank ends 100 percent mortgages and raises prices by 40%. The main banking source for 100 percent mortgages in Spain has withdrawn them from the market as of October 2017, when only pending applicants will be processed. Banco Popular also raised the prices of all property under its control by an unprecendented 40 percent.
This is seen as a double blow to 1,000s of potential buyers from the UK and northern European countries who saw the bank’s mortgages and property deals as the lowest cost route to securing their family home or buy to let investment in Spain.
Banco Popular will instead offer a maximum mortgage of 70% LTV, but with many of the apartments now looking overpriced few Spanish-based estate agents are likely to direct their buyers to the bank’s products.
One Costa del Sol real estate agent said: “In general this means 100% finance deals in Spain are no longer available for non Spanish buyers and only for very few categories of Spanish National. We will remove this bank’s properties from our website because the prices do not reflect the current market.”
Banco Popular, Spain’s fifth-largest bank, with over $100 billion in loans, collapsed in June 2017 after failing European Central Bank (ECB) stress tests. Banco Santander, Spain’s largest bank, bought the failing institution for the nominal sum of one euro after depositors withdrew money en masse and the company’s stock price plunged.
Buyers now reviewing their options on prices, mortgages and where to buy in Spain are contacting International brokers, Walker Property Spain who are offering some selected 100% mortgages from leading Spanish banks. But the widest choices for international buyers come with 70% mortgage property from other banks – some now providing mortgages for off-plan and completed villas and apartments from Costa developers.
Would-be buyers are still able to secure a bargain property in Spain in what has been a very busy year with record tourist arrivals and a buoyany real estate market? The last few months of the years are looking even busier as international buyers eye up replacements for the zero deposit mortgages and note prices are approaching pre-recession highs.
The property market is strong currently in Spain and recent months have seen the return of outstanding investor deals in several Costas offering guaranteed returns for buy to let investors. Often these prime location apartments are included in the holiday package deals of international holiday firms like Thomas Cook and Thomson and generate good reviews in TripAdvisor.