Fixed, mixed or variable: compare before the CPCV

You have three Portuguese mortgage offers. One advertises the lowest first payment, another the smallest spread, and a third a fixed rate that looks more expensive. You still do not know which costs less: the offers may use different terms, insurance assumptions and moments in the loan.

Before signing a CPCV, turn every offer into a like-for-like comparison. Then choose the risk your budget can carry without trying to forecast the next Euribor move.

First, compare the same thing

The initial payment is not enough. A longer term lowers the monthly payment but usually increases the total paid. A mixed rate can show a competitive fixed payment for the first few years without giving equal prominence to what happens afterwards.

Ask each bank or intermediary for a simulation using:

• the same loan amount;
• the same term;
• the same repayment method, without an interest-only period or deferred capital in only one offer;
• the same borrowers and purpose;
• a clear list of the insurance and products included;
• the same reference date, as far as practical.

Banco de Portugal says the APRC should compare offers with the same term and repayment method. When the inputs differ, the percentage looks objective but the comparison is not clean.

Choose the type of risk, not a “winning” rate

No structure is always best. Only at the end of the loan could you know which would have cost less. Today, the choice is between predictability, exposure to rate movements and flexibility.

With a variable rate, a low spread does not stop the payment rising when the index rises. A fixed rate buys certainty and may provide less flexibility for early repayment. With a mixed rate, do not compare only the opening period: ask for the estimated first variable payment and the formula that will apply.

Read the FINE as a contract in preparation

Every simulation should come with a European Standardised Information Sheet, called the FINE in Portugal. For a permanent owner-occupied home, the information must let you see fixed, mixed and variable conditions. After you select a structure and the loan is approved, you receive a new FINE with the approved conditions and the draft agreement.

The APRC includes interest, fees, certain taxes and registration costs, required insurance and some required account or payment costs. It does not include everything: early-repayment commission and notarial costs, for example, are excluded. Read the list, not only the percentage.

The MTIC turns the projection into a total euro amount. Use it to see the effect of the term, but inspect the assumptions: a future Euribor level is not guaranteed, and insurance premiums can change too.

A low spread can come with a shopping list

The bank may offer optional products in exchange for better mortgage terms: insurance, an account, a card, salary crediting or other services. “Optional” does not mean “without consequence”. The agreement can allow the spread to rise if you stop meeting the bundle conditions.

Run two calculations for every offer:

1. cost of the mortgage with the products and discounted spread;
2. cost without each product and with the corresponding spread.

Add annual account, card and insurance costs. For insurance, do not use only the first premium: check how it may change with age, outstanding capital and policy indexation. Compare cover as well—a cheaper policy is not equivalent if it protects less.

If you are considering external insurance, ask the bank for its guarantee requirements and for a simulation without the related discount. Keep the answer in writing.

Stress-test the payment before testing your limit

Your budget should survive a worse scenario, not only the advertised payment. Use Banco de Portugal's mortgage calculator or ask the lender for alternative illustrations.

This test does not predict rates. It measures your headroom. If a plausible rise removes all monthly saving capacity, the home or loan structure may be too tight.

Consider your holding period too. If you expect to sell, transfer the mortgage or repay early, compare flexibility. Banco de Portugal currently gives general maximum early-repayment commissions of 0.5% of capital repaid for variable-rate contracts and 2% for fixed-rate contracts, unless the agreement sets less or an exemption applies. Confirm in the approved FINE which rule applies during your rate period.

The best simulation is still not approval

A simulation FINE helps comparison. It does not guarantee that the lender will approve the amount, property or same terms. The final decision can still depend on documents, affordability, valuation, insurance and property checks.

After approval, the bank supplies the final FINE and draft agreement. Banco de Portugal says the approved terms bind the institution for at least 30 days, with a mandatory seven-day reflection period. The buyer cannot waive those seven days to speed up completion.

If you will sign a mortgage-dependent CPCV, make the timeline fit the real process. Discuss the deadline, finance condition, valuation and treatment of the deposit with a lawyer. An attractive payment does not protect the deposit if final approval fails.

Finish with a decision sheet

Create one row per offer and fill these seven columns:

1. rate structure and duration of each period;
2. total opening payment, including insurance;
3. APRC/TAEG;
4. total repayment/MTIC;
5. required products and annual cost;
6. payment in your stress scenario;
7. cost and rules to repay, transfer or remove products.

First remove offers that do not fit the stress scenario. Among the rest, choose the combination of cost, predictability, insurance cover and flexibility that matches your life plan.

Next step

Request FINEs with the same inputs and complete the seven-column sheet before negotiating the CPCV. If you cannot explain when the payment changes and how much remains in the stress scenario, the comparison is not finished.