Mixed vs Variable Rate in Portugal: The 2025 Strategy
Variable rates used to be the norm in Portugal. But in 2025, Mixed Rates (Fixed for 3-5 years) are significantly cheaper. Here is why.
Mixed vs Variable Rate in Portugal: The 2025 Strategy
Note: This content is specific to the Portuguese mortgage market.
Portugal has traditionally been a Variable Rate country. Most mortgages are indexed to the Euribor. However, with Euribor rates hovering around 3.5%, variable mortgages have become expensive (~4.2% APR).
In 2025, a new trend has emerged: Mixed Rate Mortgages.
What is a Mixed Rate?
You pay a Fixed Rate for an initial period (usually 2, 3, or 5 years) and then switch to Variable (Euribor + Spread) for the rest of the term.
Why choose Mixed now?
Banks are offering very aggressive discounts on these short-term fixed periods.
- Variable Offer: ~4.2% interest.
- Mixed Offer (3 Years Fixed): ~2.9% interest.
The Logic: You lock in a rate below 3% for the next few years, saving money immediately while waiting for the Euribor to potentially drop in the long run. It offers immediate savings and medium-term stability.
Conclusion
If you are buying in Portugal today, do not blindly accept a variable rate. Ask for Mixed Rate simulations. The monthly savings can be substantial.
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