Norwich & Peterborough is flying south with the introduction of a new addition to its range of Spanish mortgages.
The mortgage is aimed at three types of clients. First the British expatriates living in Spain and Gibraltar, second the Gibraltarians and third people in Britain who want to retire to the south coast of Spain and Gibraltar. There is no maximum age limit to the mortgage, which will make it attractive to people who are approaching retirement and who are thinking about moving abroad and may need a mortgage.
With a fixed rate of 6.49 per cent for the first five years of the mortgage, the mortgage is available for loans of up to 65 per cent of valuation. The mortgage is only available for the purchase of properties on a 150-kilometre stretch of the southern Iberian Peninsula, running from Gibraltar to Motril.
The mortgage comes with a £225 arrangement fee and a redemption penalty of six months interest during the fixed rate period.
There is a good potential market for Spanish mortgages. According to the Foreign and Commonwealth Office, the number of British expatriates living in Spain increased from approximately 630,000 in 1996 to 700,000 in 2000. And, there are 27,025 Gibraltarians.
Just four lenders offer mortgages for properties in both southern Spain and Gibraltar. These are Norwich & Peterborough, Barclays, Abbey National and Jyske Bank. But the Norwich & Peterborough mortgage is the only one that has a five-year fixed rate. The others are variable rate mortgages.