The Euribor falls: fixed or variable mortgage?

This week we learned that the Euribor has dropped again and is now very close to 2%. For those thinking about getting a mortgage, this is no small detail. It is, in fact, one of those moments that demand perspective. Therefore, my recommendation, which is not infallible—because no one has a crystal ball—responds to a way of understanding personal finances with common sense and some experience.

If the reader is about to sign a mortgage, these are at very reasonable levels for a fixed-rate mortgage. It's true that in the short term it may be somewhat more expensive than a variable rate, but it guarantees a stable payment throughout the life of the loan. And this allows you to accurately predict what you will pay each month for twenty or thirty years. Which is no small feat. It allows you to plan, sleep peacefully, and, in the future, make decisions without uncertainties that one cannot control.

It's true that rates could continue to fall. And that we could enter a new era of cheap money like the one of the last decade. But, honestly, after what we've experienced—runaway inflation, erratic monetary policies, geopolitical tensions—no one can guarantee that interest rates will remain low for long. On the contrary, the most prudent thing to do is to think that the coming years will be more volatile than in the last decade. The economy, energy, and international trade are very unsettled.

In this context, a fixed rate can be a smart decision. Because, even if rates drop further later, you'll have bought peace of mind. Stability. I've always done it this way: I've preferred to pay a little more to know for sure what my monthly spending would be. It's not so much a financial gamble as a lifestyle choice. It's a very personal thing. The opposite option is also perfectly defensible.

In any case, remember to carefully review the rest of the conditions: early amortization fees, costs of converting from fixed to variable or vice versa, subrogation costs... And, of course, your personal situation: income, job stability, future plans.

As for my advice: it's not that I know what will happen to interest rates, but precisely because I don't know, I think that, when it comes to the home and personal finances, paying a little more in exchange for certainty is, very often, a good investment.

All this, of course, if the person can afford to buy.

But that's another matter.