Fixed or variable mortgage
Choosing between a fixed or variable mortgage is a relevant decision in the operation and has no single answer: it depends on your income, your tolerance for risk and how many years of loan you have left. This guide explains how each option works — fixed, variable and mixed — what role the reference index plays, what factors to weigh before choosing and how to simulate your case in the calculator. It is written for the Spanish market.
Fixed mortgage: the payment stays stable as long as the applicable contractual rate does not change
With a fixed mortgage the interest rate is agreed at signing. The capital-and-interest payment stays constant as long as the applicable contractual rate does not change. An important caveat: if that rate is discounted and you stop meeting the linked conditions (salary deposit, insurance…), the bank may apply the non-discounted rate, so the rate and the payment rise; in addition, the insurance and fees can change separately and alter what you pay overall.
- For: stability: the capital-and-interest payment stays the same as long as the contractual rate and the discount conditions do not change. If market rates or external indices rise, they do not affect your payment.
- Against: its legal maximum early-repayment fees may be higher than a variable one's (the actual fee depends on the contract and the financial loss, see below); and if market rates fall, you do not benefit unless you switch or renegotiate.
Variable mortgage: reference index plus a margin
With a variable mortgage the rate is reviewed at the frequency set in the contract and is worked out by adding two pieces:
- For: if the reference index falls, your payment falls at the next review; early repayment fees are capped by law (see below).
- Against: uncertainty. If the index rises, the payment rises at the next review, and the index can swing widely over the years.
Mixed mortgage: a fixed stretch and then variable
The mixed mortgage applies a fixed rate for the period set in the contract and, from then on, switches to variable (reference index + margin) until the end. It combines certainty in the initial fixed stretch with exposure to the index's variations in the later stretch.
The Euribor, one of the possible reference indices
The Euribor (Euro Interbank Offered Rate) is one of the possible reference indices for variable mortgages. According to its administrator (the EMMI, European Money Markets Institute), it is the rate at which credit institutions in the European Union and EFTA could obtain wholesale unsecured funding in euro (it does not exactly equal "the rate at which banks lend to each other"). It is published daily by the EMMI, but the index and term that apply to your loan are those stated in your contract/FEIN.
The Euribor varies over time and with the monetary policy of the European Central Bank, so the payment of a variable mortgage rises or falls at each review. This guide does not state its current value: look at which index your contract references and, at each review, check the official value published for the relevant period (published by the Bank of Spain in the BOE).
The margin
The margin (in Spanish, diferencial) is the spread the bank adds to the reference index set in the contract. It is agreed at signing and stays for the whole mortgage, although the final rate can vary where the contract makes part of the margin conditional on meeting linked-product discounts (direct-depositing your salary, taking out insurance, etc.): if you stop meeting them, the applicable margin rises. The specific margin of your offer and the applicable index appear in your FEIN; check them there, not in market figures that change.
Factors to weigh before deciding
There is no better option in the abstract: the choice depends on your case. These are the factors to weigh, with no automatic conclusion:
- Budget stability: how much room you have to absorb changes in the payment.
- Ability to absorb rises in the reference index if you choose variable or mixed.
- Term of the loan and your expected horizon.
- Actual contractual cost of each offer (rate, margin, APR), not market figures.
- Linked-product discounts required and what happens if you stop meeting them.
- Expected early repayment and the legal fee limits of each type.
How to simulate fixed, variable or mixed in the calculator
Our mortgage calculator works with a fixed payment (the French system), so it does not recalculate the reference index's reviews on its own. For a fixed one it is straightforward: enter the nominal rate and you are done. To approximate a variable one, or the variable stretch of a mixed one, enter a hypothetical rate (or the one stated in your contractual documentation) and try several scenarios that you choose — they are not forecasts:
- Contractual scenario: the rate stated in your FEIN (or the reference index for the period plus your margin). This is the starting payment with your terms.
- Lower hypothetical scenario: a somewhat lower rate, to see how much the payment would fall in that case.
- Higher hypothetical scenario: a higher rate, to check whether your budget would cope with a rise.
Compare the payment of each scenario with the fixed one. Remember the limitation: with a variable mortgage the payment will change at each review, so the calculator is for comparing assumptions you choose, not for predicting the future payment. If you are unsure which rate to enter or how to read the resulting APR, review the difference between the nominal rate and the APR.
Simulate your fixed and variable payment in the calculator
Legal fees: what you can pay to repay or switch
Legal limits under Article 23 of Law 5/2019, as checked on 13 June 2026 (check the consolidated text before acting). The early-repayment limits in paragraphs 5 (variable rate) and 7 (fixed rate) apply, as a general rule, to contracts signed since 16 June 2019; the limit in paragraph 6 (conversion) also reaches earlier contracts, under transitional provision 1.3. These are the maximums:
| Item | Legal maximum |
|---|---|
| Early repayment of a variable mortgage | One of two mutually exclusive options applies (whichever was agreed): 0.25% during the first 3 years or 0.15% during the first 5 years; 0% after |
| Early repayment of a fixed mortgage | 2% during the first 10 years; 1.5% thereafter |
| Switching to a fixed rate — or to one with an initial fixed period of at least 3 years — (novation or subrogation) | 0.05% during the first 3 years of the loan's life; 0% after. It also applies to contracts signed before the law (transitional provision 1.3) |
In every case, moreover, the fee is capped by the bank's actual financial loss: if there is no loss, nothing can be charged. That asymmetry — the legal limits are much lower on a variable mortgage than on a fixed one — is one more factor to weigh if you think you may make overpayments or pay it off early.
In summary
- The fixed one keeps the capital-and-interest payment as long as the contractual rate does not change; its legal maximum early-repayment fees may be higher (the actual fee depends on the contract and the financial loss).
- The variable one (reference index + margin) has a payment that rises and falls with the index at each review.
- The mixed one combines an initial fixed stretch and variable later.
- Decide based on your income stability, term and risk tolerance, and simulate several scenarios before signing.
Official sources
- Law 5/2019 (LCCI), art. 23 — early repayment fees (BOE, consolidated text). Paragraph 6 was amended by RDL 8/2023, in force since 29 December 2023 (it does not affect the wording of paragraphs 5 and 7). Checked on 13 June 2026.
- EMMI — definition and administration of the Euribor.
- Bank of Spain — official mortgage-market reference rates (check the value for the period of your review).
Notice: this guide and the calculator are for information and educational purposes. They are not financial advice or a loan offer, and contain no real-time interest rates or market prices: any figure you enter in the calculator is your own assumption. Before taking out a mortgage, check your lender's official terms (your FEIN) and, if needed, an independent financial adviser.
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