Gráfico financiero representando la evolución de tipos de interés variables

Mortgage types

Variable-rate mortgage

Make the most of low-Euribor periods to keep your instalment down. A flexible, competitive choice for those who read the market and want the sharpest possible terms.

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How it works

The Euribor and your mortgage

The Euribor is the rate at which European banks lend money to one another. It is the benchmark index most widely used for variable-rate mortgages in Spain. Your final interest rate is the prevailing Euribor plus a fixed spread you negotiate with the bank (for example, Euribor + 0.50%).

Every 6 or 12 months, depending on your contract, the instalment is recalculated using the new Euribor figure published by the Bank of Spain. That means in periods of low rates you pay significantly less than with a fixed-rate mortgage, but in rising cycles your instalment can climb considerably.

Analysis

Pros and cons

+Advantages

  • ✓A lower starting instalment than a fixed-rate mortgage, freeing up monthly cash flow.
  • ✓Tighter spreads: banks offer smaller margins because the rate risk shifts to the borrower.
  • ✓If the Euribor stays low or falls, you save thousands of euros versus an equivalent fixed-rate mortgage.
  • ✓Lower early-repayment fees than fixed-rate mortgages.

−Drawbacks

  • ✗Uncertainty: your instalment can rise sharply if the Euribor goes up.
  • ✗It makes long-term financial planning harder, since you don't know your future instalments.
  • ✗In high-rate cycles you may end up paying more than with a fixed-rate mortgage taken out at the right moment.
  • ✗Greater financial strain on households with tight budgets when rates climb.
Ideal profile

Who is a variable-rate mortgage for?

01

Savers with a cushion

If you have the capacity to save and an emergency fund, you can absorb potential instalment rises without putting your financial stability at risk.

02

Early repayers

If you plan to repay the loan partly or fully within the first 10-15 years, a variable-rate mortgage lets you take advantage of lower initial instalments.

03

Informed investors

If you follow the market and understand interest-rate cycles, you can make informed decisions about when to take out or switch your mortgage.

04

Buyers of affordable homes

For moderate mortgage amounts, a Euribor rise has a smaller impact in absolute terms, making the variable rate easier to handle.

Frequently asked questions

Everything about the variable-rate mortgage

What is a variable-rate mortgage?
A variable-rate mortgage is a home loan whose interest rate is made up of a fixed spread (for example, 0.50%) plus a benchmark index (usually the Euribor). The instalment is reviewed every 6 or 12 months depending on how that index moves, so it can go up or down over time.
How does the Euribor affect my variable-rate mortgage?
The Euribor (Euro Interbank Offered Rate) is the index most variable-rate mortgages in Spain are tied to. When the Euribor falls, your monthly instalment drops at the next review. When it rises, the instalment goes up. That's why it's important to understand the interest-rate cycle before taking out a variable-rate mortgage.
Who should consider a variable-rate mortgage?
A variable-rate mortgage suits people with the capacity to save who can absorb potential instalment rises, those who plan to repay early within a few years, or borrowers looking for the lowest possible starting instalment while the Euribor is low.
Can I switch from a variable to a fixed rate?
Yes. Under Spain's 2019 Mortgage Law, you can subrogate or novate your variable-rate mortgage to a fixed rate at limited cost: the maximum fee is 0.15% during the first 3 years and 0% from the fourth year onwards. We help you negotiate the best switching offer with the banks.

Compare variable-rate mortgages

Find out what spread you could get and how much you'd pay each month. We compare offers from Spain's leading banks in real time.

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