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The mixed mortgage: A formula to counter the rise in Euribor

The Euribor has been the subject of news almost every day for several months due to its steady rises.

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The mixed mortgage: A formula to counter the rise in Euribor

The Euribor has been the subject of news almost every day for several months due to its steady rises. It was at its lowest point in less than a year. It has seen a significant increase since 2022, with an average value of 0.852% in July. The Spanish mortgages with variable interest will see their fees rise if they are subject to a revision.

Experts believe that inflation is the trend and that the Euribor will continue to rise. This means that most people who apply for mortgage loans today would prefer a fixed rate of interest to avoid any future increases in the Euribor. The current situation is that banks are increasing the interest rates on fixed mortgages. This means that they are now more expensive than the ones they offered six months ago, even though they are not subject to the Euribor change.

Variable loans are on the rise because of their direct relationship to the Euribor, and fixed mortgages more expensive than them, so it doesn't seem like the right time to sign a mortgage loan. There is however a product many banks are starting to recover these days that is halfway between fixed mortgages and variable mortgages: mixed loans.

BBVA explains that a mixed mortgage loan is a mortgage that combines the monthly payment at a fixed interest rate for a number of years with variable interest. The remainder of the time to maturity, variable interest will be applied. In this manner, the monthly fee, which will remain the same throughout the agreement period, will be fixed. The fee will then become variable at the agreed time and will be affected by changes in the Euribor.

Bankinter offers a fixed-rate mortgage with options for up to 10 years of amortization, 15 years or 20 years. The rest of the loan term, normally 30 years, is at a variable interest. It is a way to avoid the current rise of the Euribor and guarantee a fixed price for a set number of years. However, you still have the chance to benefit from a future drop in the European index.

It is a product that can be purchased at a fixed price for the duration of these years. This avoids Euribor escalation. It is normal for the reference index of European banks to stabilize after a while and may drop again. However, a mixed mortgage allows you to take advantage of this possibility in the future.

It is, in fact, a product that offers a higher rate of interest than variable loans. The Euribor could rise after the fixed term of the combined mortgage ends, which could lead to a higher monthly payment for the mortgage. It is recommended that people with the ability to repay the loan in full, reduce the amount of installments, take out a mixed mortgage.

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