Current Breaking News reports that some Spanish Banks - including Spanish lender 'Banco Popular' - are offering a zero-deposit mortgage in a bid to quickly sell new build apartments that have been repossessed by the banks. 'Banco Popular', in particular, is (as well as the zero-deposit mortgage) additionally offering a 'cashback' deal to buyers, which is up to 13% of the property's value. In other words, this gives a mortgage of up to 113% of the actual property price, and properties that qualify for this type of mortgage are available throughout Spain.

One apartment complex, for example, is being sold off piecemeal - including a €68,000 two-bedroom apartment and a €172,000 four-bedroom penthouse. The 113% loan-to-value mortgage therefore reportedly lends an extra €22,360 on the four-bedroom penthouse without asking for a cent in equity! This mortgage tracks the European interbank rate "Euribor" plus 0.9% for the first year, rising to 2.39% plus "Euribor" afterwards. By comparison, most Spanish mortgages tend to require a minimum 30% deposit, with interest rates starting from 2% above "Euribor".

Unlike mainstream mortgages though, 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 banks. However, it can be viewed by some people as "Free Money". Over the last few years, there have been a lot of British buyers interested in these types of deals - mainly because Sterling was weaker, and interest rates were also low. The reality is that the bank wants to get rid of these properties. It lent aggressively to developers before 2007, but when the credit crunch hit, their developments didn't sell. Consequently, when their valuations dropped sharply, these properties ended up having mortgages higher than their value.