Fixed, variable or mixed mortgage: how to choose without guessing the future
A practical guide to comparing fixed, variable and mixed mortgages in Spain: the risk in each one and how to test whether the payment is affordable.
1 min read
Choosing a mortgage type is not about predicting Euribor. It is about deciding how much uncertainty you can carry for many years.
The three options
- Fixed: the same payment for the whole loan. You always know what you will pay.
- Variable: the payment is reviewed according to Euribor plus a spread. It can go down or up.
- Mixed: an initial fixed period, then a variable rate. Check what happens when the fixed period ends.
A simple test
Calculate your payment at today's rate and again with two extra points. If the second figure leaves no room for the unexpected, a variable loan may be too risky for you.
What to compare besides the rate
- The APR, which includes interest and other costs.
- The linked products required to get a discount.
- Early repayment fees.
- The term: a longer one lowers the payment but raises total interest.
Always ask for the European Standardised Information Sheet, which lets you compare offers from different banks in the same format.
