In the UK, it always seems to me that consumers and lenders alike are totally aware of the merits of interest only mortgages, and that there is an enormous choice of products in the marketplace. Particularly when buyers are seeking to purchase investment property, the option of an interest-only mortgage would seem to make complete sense, allowing for positive cashflow and a longer term plan to pay off the loan from the expected rise in the price of a property over a 10, 15 or even 20 year period.

But in Spain, it´s a completely different story. I´ve been advising Spanish property buyers for the last 10 years and have always maintained that the Spanish mortgage market is way behind the times when compared with the choices available in the UK.

I took out a 60% mortgage with Banco Sabadell last June, and asked for a period of interest only payments. This made complete sense to me. I had secured a wonderful property at what I considered to be a great price, but with the global economy in peril and with Europe in the grip of a deep recession, I wanted to keep a close eye on my cashflow and give myself a bit of breathing space if I needed it.

I received a 12 month interest only period from the bank, and at the time I recalled that it felt like the bank had bent over backwards to get this facility agreed at their head office. Apparently I was the only customer to have a Spanish interest only mortgage within that particular branch! How lucky!

I have just had a meeting with the bank to try to re-negotiate the terms of my Spanish mortgage deal as I wanted to extend the interest –only option by a further 12 months. This time the reasons were similar to before, but also because I have decided to cash in on a rise in the value of my property and sell the house, so I didn´t see the point in paying out an extra 700 euros a month while waiting for the house to sell, knowing that only about 50 euros of that amount would actually go towards paying off the capital each month.

The bank just don´t get it. The manager looked at me as if I´d just kidnapped his mother! He told me that I really should be starting to pay off the capital. When I asked ´Why?´ he said that this was the agreement I had signed 12 months ago, and so I should honour that undertaking. I didn´t fall out with the guy, but it was clearly apparent that I was asking for something that was not at all the norm. ´In England, this interest-only thing may be common, but here in Spain, we don´t have it´……that´s me told then!

I checked with a mortgage broker and she assured me that at present there is only one bank offering interest-only mortgage facilities as the norm in Spain. The bank of course is the Halifax, and there are no surprises to learn that it´s a bank with its origins in the UK.

Anyway, the upshot is that if it takes me (say) 12 months to sell my house in Spain, I will have paid around €8,500 during that time in extra repayments (above the interest-only amount), of which less than €1,000 will actually have been paid off my mortgage. So I could be about to pour €7,500 down the drain, purely because the Spanish ´don´t get it´. Am I right to be frustrated, or am I being unreasonable? I would be interested to know of anyone else who has had similar issues.