Mixed-rate mortgages hit 15% of new loans: what it means on the Costa del Sol

Update, 16 October 2026: since this article was published, the ECB has raised rates again (on 10 September it set the deposit facility rate at 2.50%, effective from the 16th) and the one-year Euribor closed September at 3.247%, according to the Bank of Spain. The market figures in the rest of the text are from the end of August.

Mixed-rate mortgages — a fixed rate for the first few years, then a variable one — reached 15% of all new loans signed in Spain in July 2026, three times the share seen in January and the highest in ten months. The reason is straightforward: with Euribor close to 3%, banks are pricing the initial fixed period well below what they charge on a 25-year fixed mortgage, and many buyers are betting that the current rise will prove temporary.

What exactly is a mixed-rate mortgage?

It is a hybrid loan with two stages. For an initial period — typically three to ten years — you pay a locked fixed rate, with the same instalment every month. When that period ends, the loan automatically switches to a variable rate, reviewed against Euribor plus a margin agreed on day one. Neither the margin nor the term is renegotiated later: whatever you sign at the outset is what will apply ten years from now.

That is the key difference from a fixed rate: you are not choosing between safety and risk, you are choosing how many years of safety you buy, and at what price.

Why are mixed-rate mortgages back now?

Because the rate cycle has turned. Euribor ended July 2026 at 2.85%, its highest level in almost two years, and in August it crossed 3% on a daily basis and closed with a monthly average of 2.954%. Behind this is the ECB, which raised its policy rate from 2% to 2.25% in June and raised it again on 10 September, to 2.50%.

The case made by those signing a mixed-rate loan is that today's levels are high by historical standards: the long-run Euribor average is around 1.92%, well below August's 2.954%, although that figure is distorted by the years of negative rates between 2016 and 2022. Looking only at the period since 2022, the average rises to 2.89% — essentially where the index stood in August. That nuance matters and deserves a place in the decision.

There is also a purely banking reason: lenders are being more aggressive at short maturities, driven by large balances of non-interest-bearing deposits and by the widening gap between the cost of hedging at 15 years (which underpins a fixed mortgage) and at 5 years (which underpins the fixed leg of a mixed one). That is why a mixed-rate loan can be cheaper up front without the bank giving up margin.

What do you actually pay today with each type of mortgage?

These are the rates on offer in the Spanish market at the end of August 2026, together with the resulting instalment on a €300,000 loan over 25 years. The payments are our own calculation based on the nominal rate, excluding insurance and linked products.

The gap between a 5-10 year mixed loan and a fixed one is around €61 a month in this example. Hardly a fortune, but over a ten-year fixed leg it adds up to roughly €7,300 saved before taking on any risk at all. Watch the APR, though: on mixed loans it tends to hover around 4% because it factors in the estimated variable stage, so comparing headline nominal rates alone paints an overly flattering picture.

What happens when the fixed period ends?

This is the question that decides the whole thing, and almost nobody models it. Take the mixed loan above: €300,000 over 25 years, with five years at 2.50%. At the end of year five, roughly €254,000 would still be outstanding, with 20 years to run. Here is what happens to the payment depending on where Euribor sits that day, assuming a 0.50% margin.

A practical rule: before signing, work out the payment with Euribor at 4% and ask yourself whether you could cover it on today's income. If the answer is no, a mixed-rate loan is not your product, however tempting the opening rate looks.

How much do you actually need to finance on the Costa del Sol?

The €300,000 examples are useful for comparing products, but on the Costa del Sol the numbers are different. Below are the real median asking prices from our own catalogue — 8,789 properties currently listed — alongside the amount to finance assuming 70% of the price, the usual ceiling for a non-resident buyer, and the resulting payment over 25 years at a 2.50% fixed leg.

The larger the capital, the more every tenth of a point weighs. In Marbella, moving from 2.50% to 4% once the fixed leg ends adds several hundred euros a month; in Torremolinos the same shift is far less noticeable. Which is why the fixed-versus-mixed decision is simply not the same on a €350,000 apartment as it is on a €1.2 million villa.

Who is a mixed-rate mortgage right for?

It makes sense, particularly with fixed legs of five to ten years, for these profiles:

• Buyers expecting a clear jump in income during the fixed years, who could absorb a higher payment afterwards.
• Buyers who plan to sell before the variable stage kicks in — a second home with a seven or eight year horizon, for instance.
• Buyers holding enough liquidity to make early repayments if Euribor spikes once the fixed leg expires.
• Investment buyers with rental income that also rises with inflation.

It is the wrong product if the payment is already tight today, if the loan is the only route to buying with no financial cushion behind it, or if you simply need to know what you will be paying fifteen years from now. In those cases a fixed rate, even at a slightly higher monthly cost, buys peace of mind.

Does anything change if you are a foreign buyer?

Yes, quite a lot. As a non-resident, standard financing reaches 60-70% of the valuation rather than 80%, so you need more of your own capital up front, on top of purchase costs of roughly 10-12% in taxes, notary and registry fees. What each bank offers also varies far more between lenders than it does for a resident, because the risk assessment depends on where you pay tax and in which currency you are paid. Asking for three offers and negotiating them in parallel is not generic advice: on deals in Marbella or Estepona, the gap between the first proposal and the best one is typically measured in tens of thousands of euros over the life of the loan.

How to decide without gambling on Euribor

A mixed-rate mortgage is neither a fad nor a trap: it is an explicit bet that in five or ten years rates will be lower than they are today. It may well pay off, and Euribor's history gives that view some support. But it should only be signed by someone who can afford for it to go wrong. Run the numbers with Euribor at 4%, compare APRs rather than headline rates, and pick the product based on how long you will actually hold the property, not on which one has the lowest payment in year one.

At EVS Property Group we handle the property side of that decision: what is really being paid per square metre in each town, how much negotiating room a specific listing has, and what capital growth or rental return you can reasonably expect. If you are weighing up a purchase on the Costa del Sol and want to line up price, financing and objective before committing, get in touch and we will go through your own figures.

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