Hipoteca ClaraFixed, variable or mixed mortgage in Spain
Choosing the interest rate is one of the decisions that weighs most on a mortgage. Here is how the three types work and what risk each one carries.
The interest rate sets what you pay for the borrowed money. In Spain there are three types.
Fixed rate
The rate does not change for the whole life of the loan. The payment is always the same, so from day one you know how much you will pay in total. In return, the bank usually offers a slightly higher starting rate than a variable one, because it takes the risk that rates rise.
Variable rate
The rate is a reference index, usually Euribor, plus a spread agreed in the contract. The index is updated at each review (normally once a year, in some contracts every six months), and the payment changes with it. If Euribor rises you pay more; if it falls you pay less.
Spain's Law 5/2019 requires the bank to hand over, for variable mortgages, a separate document with the payments under different scenarios for interest rates (article 14).
A variable-rate example
With 2.5% Euribor and a 0.75% spread, the rate is 3.25% and the payment in the first year is €730.97 (a €150,000 loan over 25 years). After the first review:
| Scenario | Rate | Payment |
|---|---|---|
| Euribor does not change | 3.25% | €730.97 |
| Rises by one point | 4.25% | €809.77 (+€78.79) |
| Falls by one point | 2.25% | €656.74 (−€74.23) |
Mixed rate
It combines both: an initial period at a fixed rate and then a variable rate tied to an index. During the fixed stretch the payment is stable; when it ends, it depends on the index.
What to compare
- The rate and how long it lasts: how long the fixed rate lasts, if there is one, and which index and spread apply afterwards.
- The TAE: it includes costs added to the rate. See the guide on TIN, TAE and spread.
- Discounts and tied products: rate reductions in exchange for taking other products, whose cost must be added.
- The fee for repaying early: it differs between fixed and variable. It is in the early repayment guide.
No type is best for everyone: it depends on how much risk you are willing to take and on your budget. Try several cases in the mortgage calculator: switch between fixed and variable and change the future Euribor to see the effect on the payment.
Note: the example is illustrative and the Euribor values are assumptions, not forecasts.