Mixed rate (fixed then variable)
A rate structure in which the loan starts at a fixed rate for a defined period (e.g. 5 or 10 years) then automatically switches to a capped variable rate for the remaining term. This structure can offer a lower initial fixed rate than a full-term fixed rate, in exchange for uncertainty in the second phase. The broker explains the variable-phase risks and checks the applicable cap.
Key points
- The fixed phase typically lasts 5, 7, or 10 years depending on the contract.
- The initial fixed rate is often lower than that of a fully fixed loan over the same total term.
- The variable phase is almost always capped to limit upside risk.
- This product suits borrowers planning to sell or renegotiate before the variable phase.
Frequently asked questions
For which type of borrower is a mixed rate most suitable?
It suits buyers who anticipate selling the property or making early repayment before the fixed phase ends, as well as profiles who accept moderate uncertainty in the second period in exchange for a more attractive starting rate. The broker must ensure that the borrower understands and can absorb the variability of phase two.
How is the TAEG of a mixed-rate loan calculated?
The fixed phase is included at its contractual rate. For the variable phase, the calculation uses the maximum rate permitted by the cap, as for any capped variable loan. The resulting TAEG thus reflects the total cost in the worst contractually foreseeable scenario, enabling the borrower to compare the offer with a purely fixed-rate loan.
What is the difference between a mixed-rate loan and a modular loan?
A mixed rate describes a rate structure that changes over time (fixed then variable), whereas a modular loan refers to the ability to adjust the monthly payment or term during the loan's life, regardless of rate type. Both features can coexist in the same contract but address different needs.
In practice
A borrower takes out a €250,000 loan over 20 years: fixed rate of 2.80% for 7 years, then Euribor 12-month + 1% capped +2 for the remaining 13 years. During the fixed phase they enjoy a predictable monthly payment before any potential switch.
Official sources
- Getting a mortgage (mixed rate) · Service-Public.gouv.fr
- The annual percentage rate (APRC) · Service-Public.gouv.fr
- Mortgage credit (official guide) · Service-Public.gouv.fr