Mortgage with mixed interest rate: How does it work after all?

Want to switch to a mixed interest rate regime on your credit already? Talk to a credit intermediary from Poupança no Minuto and access a free service!  

Mixed interest rate has been the most contracted regime in mortgage credit.

The mixed interest rate regime in mortgage credit has been increasingly adopted by clients at the time of house purchase, as well as the most promoted regime by banks to attract new clients.

This is because it is the ideal plan for those looking for a lower rate currently, being able to then return to the variable rate when it is expected that Euribor values will decrease.

What is the mixed interest rate in housing credit, after all?

But after all, how does it work? According to Banco de Portugal (BdP), cited by Notícias ao Minuto, "in loans contracted at a mixed interest rate, the parties agree that the credit agreement has a fixed rate period, followed by a variable rate period".

For example, "a 30-year home loan can have a fixed rate for the first 5 years and a variable rate, indexed to Euribor, for the remaining 25 years".

So, during the period in which the variable rate is in force "credit institutions cannot revise the value of the benchmark with a different frequency from the term of that same benchmark." That is, "in contracts where the benchmark is the 3-month Euribor, the value of that rate can only be revised every 3 months," the BdP quoted in the news further explains.  

With this regime becoming a more chosen option by the Portuguese, banks have been investing in promoting new interest rates in this regime. Contrary to Euribor rates that are close to 4%, there are banks offering mixed rates starting at 2.50%, fixing the rate for short periods (1, 2, 3 years). Mixed rates.

"This, at a time when the option for completely fixed rates continues to be residual in housing credit contracts," can be read in the news.

Prepare, in the most recent banks of BdP there was a significant increase in new housing credit operations with a mixed rate, going from 16% of the amount of new operations in December 2022 to 71% in December 2023.

Do you want to hire a new mortgage with this mixed interest rate regime? Or renegotiate the conditions of your current loan / transfer it to a new bank, so you can access this regime? Credit intermediaries from Poupança no Minuto take care of everything for you... the service is free and they handle all the bureaucracy, finding the most suitable proposal for you! (Source: Poupança no Minuto)