Note
Fixed vs variable Spanish mortgage
Quick answer
A fixed rate gives certainty and a variable rate moves with an index. For loans signed on or after 16 June 2019 the early repayment cap is 2% in the first 10 years, then 1.5% for fixed loans, and 0.25% in the first 3 years, or 0.15% in the first 5 years if agreed for variable loans. We give no current rates, since they change.
Applies toBorrowers choosing between a fixed and a variable rate.
On this page: 10 sections
§ 1The basic difference
With a fixed rate, the interest rate does not change during the fixed period, so the instalment is predictable. With a variable rate, the rate follows a reference index plus a margin, and the lender revises it at set intervals, so the instalment can rise or fall. This page belongs to the chapter in more on rates and repayment.
§ 2What a fixed rate buys
Certainty. If you have a tight budget, a fixed rate protects it from a rise in rates. The price of that protection is that the starting rate is set by the lender in the knowledge of market expectations, and that leaving early can cost more. The Bank of Spain gives the cap for fixed-rate loans signed on or after 16 June 2019 as 2% in the first 10 years, then 1.5%.
§ 3What a variable rate buys
Participation in market movements. If the index falls, so does your instalment. If it rises, so does the instalment. For variable loans the early repayment cap is lower: 0.25% in the first 3 years, or 0.15% in the first 5 years if agreed. A variable rate suits a borrower who has a margin in the budget or who plans to repay early. The Euribor page explains the usual index.
§ 4The margin
In a variable loan, the lender adds a margin to the index. The margin is part of the offer and is set in the contract. Compare margins as well as the index, and ask whether the margin depends on products linked to the loan. The law generally prohibits tied sales, and the Bank of Spain’s summary says so.
§ 5A floor
Some variable contracts contain a minimum rate below which the interest cannot fall. The law requires the warnings sheet to flag such limits. Read that sheet carefully, and ask your lawyer about any floor.
§ 6Testing the choice
Take the offered instalment and test it three ways: at the rate today, at a rate meaningfully higher, and with your income lower. If the instalment is acceptable in all three, the choice is safe. If only the fixed offer passes, choose fixed.
§ 7Mixed loans
A mixed loan fixes the rate at the start and varies it afterwards. More on mixed rate explains it, including the legal minimum for the fixed period.
§ 8Switching
Moving from one type to another is possible by agreement with your lender or by moving the loan, within the terms the contract and the law set.
§ 9Questions for the lender
Ask what the margin is, what products are linked, how the rate is revised and what compensation applies if you leave early. Ask for it all in the standard information sheet so that two offers can be compared line by line.
§ 10More on this topic
More on Euribor explains the index and more on repaying early explains the caps, notice and information.
More on euros or pounds explains the currency choice.
FAQRelated questions
Which is cheaper, fixed or variable?
It depends on rates over the life of the loan, which nobody can know. Compare the two offers on the same day, using the total cost on the standard information sheet, and test the variable one against a rise in the index.
Does the type affect early repayment?
Yes. The legal caps differ: higher for fixed-rate loans and lower for variable-rate loans, according to the Bank of Spain. A variable loan is cheaper to leave in the early years.
Can I change later?
Often through novation or by moving the loan to another lender, subject to conditions and costs. Ask what the contract says. We do not state a figure, because the Bank of Spain’s pages differ on one cap.
Sources
- Banco de España, Cliente Bancario: Compensación o comisión por reembolso o amortización anticipada total o parcial de una hipoteca (official source, opens in a new window), Caps for loans signed on or after 16 June 2019Last checked 18 October 2026
- Boletín Oficial del Estado: Ley 5/2019, de 15 de marzo, reguladora de los contratos de crédito inmobiliario (official source, opens in a new window), Articles 8, 10, 14 and 15 read; later articles not readLast checked 18 October 2026
- Banco de España, Cliente Bancario: Reembolso anticipado (official source, opens in a new window), Notice, information and cost of early repaymentLast checked 18 October 2026
Financial note. No rate is printed unless it comes from a dated, official publication. Capital is at risk, exchange rates move, and no lender, broker or provider is recommended here. Mortgage terms are set by each lender; ask a registered intermediary about yours.