The trend towards mixed rates is justified by the search for greater financial stability and the pressure from the Euribor over the last two years.
Source: Freepik
Author: Redaction
Euribor rates have given no respite to home loan borrowers, who have felt
a squeeze on their installment payments over the last two years, although this is a trend that is set to reverse, given the signs of decreases.
Variable rates used to be the most popular type of mortgage, giving way to mixed rates with fixed interest as the preference of thousands of families, followed by variable rates for the remainder of the contract: "in 2023, there was an increase in new [own and permanent] housing loan operations with a mixed rate - that is, loans with a fixed interest rate for an initial period of the contract, followed by a period in which the interest rate is variable - which went from 16% of the amount of new operations in December 2022 to 71% in December 2023", explains the Bank of Portugal (BdP).
However, despite the initial relief, mixed rates entail a short fixation period that leaves borrowers protected for only the first two or three years of the contract. Even so, among the main preferences for choosing this type of rate is the sharp rise in Euribor rates, the search for greater stability and the preference for fixed rates in the initial period of the contract, which are lower due to promotional campaigns by the banks.
As a result, the fixed rate is the choice of more households, and in December, according to the most recent data from the BdP, this type of rate was contracted by 4.05% of borrowers, while the variable rate was contracted by 4.87%, in new loans for own and permanent housing.
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