In 2018 I signed my first variable-rate mortgage. The 3-month Euribor was at -0.32%, the spread on offer was 0.75. The starting instalment came in just under €600 for €150,000 over 25 years. It looked like science fiction. Five years later, in September 2023, that same instalment had become €891: I had lost €290 a month without lifting a finger. From then on I stopped treating the mortgage as a bet on rates and started treating it as a choice about how much sleep I was willing to lose every night.
It is now April 2026. The 3-month Euribor is at 2.165%, in a steady decline after the peaks of 2023–2024. The "fixed or variable" question is alive again, but the 2018 answers no longer hold. Let's see why.
What Has Really Changed Between 2024 and 2026
Three things. First: the ECB has cut rates for the sixth time since June 2024, bringing the deposit rate to 2.00%. Second: the 3-month Euribor, which was above 4% in October 2023, is now hovering just above 2.1%. Third, the less-told story: the 20–25 year IRS — the curve banks use to price fixed rates — has fallen below 2.9%. That means today you can find fixed-rate mortgages at 3.2–3.6% TAEG, against the 4.5–5% of two years ago.
The practical upshot is that the difference between fixed and variable instalments, at the start, is the narrowest in three years. On €150,000 over 25 years, we are talking about a gap of €30–50 a month. That is little. And when the gap is small, the fixed rate becomes interesting again.
The Three Questions I Asked Myself Before Choosing (and That I Would Ask You Today)
When I went to the bank for refinancing in 2024, the advisor pulled out the Euribor forward curves. Lovely. Useless. Nobody knows where the Euribor will be in five years. I tossed the charts and asked myself three questions, in this order.
How much can I take if the instalment goes up by 30%? Not 5%, not 10%. Thirty. Because between 2022 and 2023 it happened, and that was the first thing I learned the hard way. If my starting variable instalment is €700 and I can't pay €910 without giving up something I really need, the variable is not for me. Full stop.
How long have I been in the same job? The more stable my employment situation is, the more I can afford to take rate risk. If instead I have changed jobs twice in five years, or I am self-employed with patchy income, the fixed rate buys me one less variable to manage.
Does my bank offer free fixed-to-variable conversion? Some contracts — not all, you have to read the SECCI — let you switch from fixed to variable (or vice versa) once during the life of the mortgage at no cost. It is an option worth its weight in gold, especially if I start fixed and the Euribor really collapses to zero.
Fixed Today: Real Numbers on a Standard Mortgage
Take a concrete case: €160,000 of principal, 25-year term, first home, employee with a 65% LTV. That is the average Italian borrower profile according to the latest Bank of Italy survey.
The best fixed offers I have seen around in April 2026 sit between 3.15% and 3.50% TAN. Including processing and appraisal fees, the TAEG climbs by a comfortable tenth. With these parameters, the monthly instalment works out as follows:
| Fixed TAN | Monthly instalment | Total interest (25 years) | Total cost |
|---|---|---|---|
| 3.15% | €768 | €70,481 | €230,481 |
| 3.30% | €783 | €74,940 | €234,940 |
| 3.50% | €801 | €80,470 | €240,470 |
The formula is the usual French amortisation: R = C × i / (1 - (1+i)^-n), where i is the monthly rate (annual TAN / 12) and n the total number of instalments. For the first case: i = 0.0315/12 = 0.002625, n = 300, and (1+i)^-n = 1/(1.002625)^300 ≈ 0.4555. Result: R = 160,000 × 0.002625 / (1 - 0.4555) = 420 / 0.5445 ≈ €771. The difference with the €768 in the table is rounding.
What the table does not say but is crucial: in the first five years of a French-amortised mortgage, more than 60% of every instalment is interest. If I am thinking of selling the house within eight years, I am giving money to the bank without seriously reducing the principal. It is one of the reasons why in Italy it pays to keep the mortgage to the end or, alternatively, to make a full early repayment.
Variable Today: Starting Instalment and Upward Scenarios
The same €160,000 mortgage over 25 years, in variable form, starts on average with a spread between 0.90 and 1.40 over the 3-month Euribor. With the Euribor at 2.165%, we are in a TAN range between 3.07% and 3.57%. Practically overlapping with the fixed.
The starting instalment is therefore similar, but — and here is the whole point — it can rise and fall every three months. Let's see what happens in three realistic scenarios.
| 3-month Euribor scenario in 24 months | Resulting TAN (spread 1.10) | Monthly instalment | Change |
|---|---|---|---|
| 1.00% (aggressive ECB cuts) | 2.10% | €686 | −€95 |
| 2.165% (unchanged) | 3.265% | €781 | 0 |
| 3.50% (rate hike on inflation) | 4.60% | €905 | +€124 |
| 4.50% (shock similar to 2023) | 5.60% | €989 | +€208 |
The most aggressive scenario is not fantasy: it is exactly what happened between October 2022 and September 2023, in eleven months. Anyone who had signed a variable in 2021 with a €600 instalment found themselves paying €880–900 with no warning. And they stopped sleeping.
That is why, when I use a mortgage instalment calculator to simulate a variable, I don't just look at the starting instalment but run at least three simulations with different rates. If the +€200 instalment scares me, the variable is not the right product.
When Fixed Is NOT the Right Choice (and When Variable Is NOT)
Fixed today is NOT the right choice if:
- You have a serious plan for full early repayment within 5–7 years (e.g. an inheritance on the way, the sale of a previous property).
- You work in a sector with high career visibility and expect your income to double within 3–5 years: the variable lets you take advantage of any drops and then close out.
- The IRS will fall further over the next 6 months (a plausible scenario if core inflation stays below 2%): locking in the fixed today means paying a tenth more than someone signing at the end of the year.
The variable is NOT the right choice if:
- The starting instalment already absorbs more than 30% of net household income. There the room for manoeuvre is zero, and a +€200/month break breaks the budget.
- You are taking out the first mortgage of your life and have never managed variable-rate debt. The emotional management of an instalment that changes is not trivial — I say this as someone who has lived through it.
- You are close to retirement: the fewer years you have ahead of you, the less time there is for any rate cuts to give you back what you paid extra in the bad months.
Practical Checklist Before Asking for a Quote
- Calculate a sustainable instalment: no more than 30% of net household income net of other debts. It is the threshold the banks themselves use in scoring.
- Always ask for two quotes: one fixed and one variable, from the same bank, on the same term. Seeing the real gap is different from reading about it on forums.
- Read the SECCI before signing: it is the standardised information sheet. You will find spread, ISC, processing fees, accessory costs. The surprises are all in there.
- Check the conversion clause: switching from fixed to variable (or vice versa) at least once for free should be standard. If it is not there, ask why.
- Compare at least 3 banks: spread and fees vary noticeably. I have seen people lose €8–10K over 25 years by not asking a third bank.
- Keep refinancing in mind: if in five years rates are much lower, you can move the mortgage to another bank at no cost. It is a right enshrined in the 2007 Bersani Law.
Frequently Asked Questions
Is it worth waiting for further ECB cuts before signing?
It depends. If you need the house now, no: most of the upcoming cuts are already priced into current rates. If instead you can wait 6–12 months without trouble and you see signs of inflation continuing to fall, you might still squeeze out a few more tenths of a discount. But that is a bet, not a forecast.
Mixed rate: is it worth it?
It is a compromise that works for very few profiles. Typically it starts fixed for the first 5–10 years and then becomes variable (or vice versa). It pays off if you are sure that within 10 years your income will be much higher and you will be able to handle the swings. In every other case you take home the worst of both worlds.
If the Euribor goes negative as in 2018, does the instalment go to zero?
No. Almost all Italian contracts have a "floor" clause that pegs the Euribor at zero for the calculation. That means your minimum TAN, even with Euribor at -0.5%, will simply be the spread (e.g. 1.10%). The Bank of Italy circular 285 of 2013, retail mortgages section, also says so.
How long before refinancing pays off?
The rule of thumb: if you find a fixed rate at least 0.80–1.00 points lower than yours, and you have at least 10 years of mortgage left, refinancing pays back the hassle in 12–18 months. Below that threshold it is often not worth the candle.
Fixed and variable together: is it possible?
Yes, some banks let you split the principal: half fixed, half variable. It is a serious middle path, especially on amounts above €200,000. But watch out for the processing fees, which can double.
Conclusion (and My Advice After Eight Years of Mortgage)
In 2026, with fixed and variable rates practically aligned at the start, the choice is no longer mathematical but psychological. If the prospect of an instalment that changes keeps you up at night, no theoretical saving can justify two years of anxiety. If instead you know how to handle the swings and have a financial cushion of at least six months of instalments set aside, the variable can still give you back something over the next 24–36 months.
Personally, after living through 2023 in my own skin, today I would sign a fixed again. I pay a tenth more to sleep. But that is my answer, not yours. To build yours, try plugging your numbers into a mortgage instalment simulator using both scenarios: seeing the instalment you would actually pay, in fixed and in variable, does more than a thousand pieces of advice read on the internet.
Related reading on mortgages
- Mortgage spread: how to read it in the SECCI and why different banks offer you a different one — before signing, check how heavy the spread weighs on you.
- French amortisation: how it really works, explained step by step — to truly understand the amortisation schedule attached to the contract.
- First-home mortgage 2026 for under-36s: tax benefits, the Consap fund, mistakes to avoid — if you are under 36 and buying your first home.