Fixed, Variable or Mixed Rate: what is the difference?

The variable rate moves with the underlying index, such as Euribor, plus the agreed spread. A fixed rate keeps the instalment stable for the agreed period, while a mixed rate combines an initial fixed phase with a later variable phase.

In practice, a variable rate may start with a lower instalment, but it is exposed to increases over time. A fixed rate offers greater predictability, although usually at a higher initial cost. A mixed rate can balance the two, with a more stable opening phase and a later phase tied to market conditions.

For example, on a EUR200,000 loan, a variable rate may start with a lower instalment but rise over time if interest rates increase. A fixed rate may involve a higher starting payment, but it guarantees stability for the agreed period.

When comparing proposals, it is not enough to look at the initial monthly payment. You need to understand how the rate choice affects predictability, upside risk and the total cost over the life of the loan.

Talk to a specialist to compare fixed, variable and mixed-rate scenarios for your case.