When you compare Portuguese mortgage offers, the first choice is the type of rate. It shapes your monthly payment for years, so it deserves more thought than the headline rate.
Variable rate
Your rate is Euribor (usually 6 or 12 months) plus a fixed spread negotiated with the bank. The payment is revised at each Euribor reset: it falls when rates fall, and rises when they rise. It suits buyers with a comfortable budget who can absorb a higher payment.
Fixed rate
The rate stays the same for the whole loan. You know your payment from the first month to the last, whatever happens to Euribor. Full-term fixed rates are less common in Portugal and are usually priced higher at the start.
Mixed rate: the Portuguese favourite
A mixed rate is fixed for an initial period, often 2 to 10 years, then becomes variable (Euribor plus spread) for the rest of the loan. It gives you certainty in the first years, when the loan balance is highest, and flexibility afterwards.
What early repayment costs
Portuguese law caps the early repayment fee at 0.5% of the amount repaid for a variable-rate loan, and 2% for a fixed-rate loan or during the fixed period of a mixed loan. If you plan to repay part of the loan early, for example after selling a property abroad, this can tip the balance.
How to choose
- Your margin: could you still pay if your monthly payment rose by 15 to 20%? If not, favour a fixed or mixed rate.
- Your plans: selling or repaying within a few years makes a variable rate more attractive.
- The total cost: compare the APR (TAEG) and the total cost of the loan (MTIC), insurance included, never the nominal rate alone. See step 3 of our mortgage guide.
- Currency: if your income is not in euros, a fixed or mixed rate removes one source of uncertainty.
For the full picture of how Portuguese mortgages work, read our guide to mortgages in Portugal.
Not sure which rate fits your plans? Book a free call back: we compare fixed, mixed and variable offers from several Portuguese banks on the total cost of the loan.
