Understand the differences between fixed and variable mortgage rates and discover which best suits your profile and long-term financial goals.
Choosing between a fixed or variable interest rate is one of the most important decisions you’ll make when taking out a mortgage. This choice directly affects your monthly payment, the predictability of your repayments, and how you deal with fluctuations in the Euribor.
At Credit Place, an authorised credit intermediary regulated by the Bank of Portugal, we help clients clearly understand the differences, analyse various scenarios, and make informed decisions — always at no cost to you.
What is a fixed rate?
With a fixed rate, your monthly instalment stays exactly the same throughout the entire term of the loan, regardless of how the Euribor changes.
Advantages:
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Stability and predictability in your monthly payments.
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Protection against rising interest rates.
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Greater security for long-term financial planning.
Disadvantages:
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Typically comes with a higher spread and interest rate.
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Less competitive when Euribor is low.
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Reduced flexibility to repay early or transfer your mortgage.
What is a variable rate?
With a variable rate, your monthly instalment changes over time, as it’s tied to the Euribor (reviewed every 3, 6, or 12 months) plus the spread set by your bank.
Advantages:
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Potential for lower monthly payments when the Euribor drops.
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Often more competitive in the short to medium term.
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Easier to repay early or transfer to another bank with better conditions.
Disadvantages:
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Exposed to market fluctuations.
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Less predictable financial planning.
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Risk of higher payments if the Euribor rises.
Is there a middle ground?
Yes — the mixed rate. This option starts with a fixed rate for an initial period (for example, 5 years) and then switches to a variable rate. It can be a smart choice for those who want stability at the start but more flexibility later on.
How to decide?
The right choice depends on your personal profile, risk tolerance, and the current economic climate:
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If you value stability and fixed payments: consider a fixed rate.
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If you’re comfortable with some variation and want lower payments at first: a variable rate may work best.
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If you plan to transfer or repay your mortgage soon: a variable rate could be more advantageous.
Ideally, you should run mortgage simulations under different scenarios and compare offers from multiple banks.
Why work with Credit Place
Comparing mortgage offers takes time and expertise. Factors such as the spread, fees, and insurance requirements can significantly affect the total cost of your loan.
As an authorised credit intermediary, Credit Place can help you:
- Understand the implications of each mortgage type.
- Negotiate better terms on your behalf.
- Choose the rate that truly fits your financial needs.
And if you’re also considering buying or selling a property, our group’s real estate arm — LUXIMOS Christie's International Real Estate, operating in Porto, Northern Portugal and the Algarve — offers integrated, premium property solutions.
Get your free mortgage simulation today and find out whether a fixed, variable, or mixed rate is the best option for your home loan. Make safe, informed decisions with the guidance of trusted specialists.