Mortgage rates – differences between fixed, variable and mixed rates

22 Apr

Here is a brief preview of the types of rates we can choose when we are going to structure a mortgage transaction:

Fixed rate
The rate, whose reference rate is the EURIRS (Euro Interest Rate Swap), remains unchanged for the entire duration of the loan as well as the installment.
Fixed-rate mortgages are advisable for those who expect inflation to increase or want to know immediately the amount of debt contracted and the exact amount of the installments they will pay over time.

Variable rate

The variable rate, whose reference rate is the EURIBOR (Euro Interbank Offered Rate), as well as the installment varies based on market conditions.
Variable rate mortgages can be redeemed for those who expect a declining inflation or are more prone to risk.

Mixed rate
The mixed rate can be modified over the time frame of the loan passing from the fixed rate to the variable rate based on the contract conditions.
Mixed rate mortgages are advisable for those who do not intend to determine a reference rate immediately or in the event that the market conditions are sufficiently uncertain for which there is no precise inflation forecast.

Capped Rate

Loan Rate

The Capped Rate rate is a variable rate with a pre-established maximum limit that cannot be exceeded even if the market conditions vary considerably to the detriment.
Capped rate mortgages are advisable for those who favor a variable rate mortgage solution but want to limit their risks

Balanced Rate


The balanced rate is composed of a part of a fixed rate and a part of a variable rate.
Balanced-rate mortgages are advisable for those who do not want to take the risk of a variable rate and want to balance the benefits with the fixed rate.