
Fixed-rate versus variable mortgage interest
The features at a glance
If you’re taking out a mortgage, you’ll have to pay interest every month. You can opt for a fixed or a variable interest rate. How do you know which type of interest is right for you? And what the pros and cons are? Find out which interest type is right for you.
The difference between fixed-rate and variable interest
Fixed interest rate
Pros:
- You know exactly how much you’ll pay each month
- You can sometimes opt for an interest rate reflection period
- You can repay up to 10% of the principal sum every year at no extra charge
Cons:
- You don’t benefit from drops in the interest rate
- The longer you fix your interest rate period, the higher the rate usually is
Variable interest rate
Pros:
- You can fix your interest rate free of charge at any point
- You can make extra repayments whenever you like, at no charge
- Your monthly payments drop if the interest rate drops
Cons:
- Your monthly payments rise if the interest rate rises
- Your monthly payments can vary, so you never know quite where you stand

Discount on your mortgage interest rate
If you have an ABN AMRO current account, which your income is paid into, or if you’re buying an energy-efficient house or making home improvements, you’ll get a discount on your mortgage interest rate.
More information
Fixed-rate period
A fixed interest rate means that your interest stays the same for a fixed period. You won’t benefit if interest rates drop, as you would with a variable interest rate. In certain situations, you can lower your fixed-rate interest when the ratio between your house and your mortgage changes. Take a situation such as the ‘WOZ’ value increasing, or one in which you have made additional mortgage repayments. This could change the rate category of your mortgage interest, and possibly entitle you to pay less interest.
Interest rate reflection period
If you opt for a fixed interest rate with an interest rate reflection period, you can decide when to start a new fixed-rate period any time in the last two years of your fixed term. If you expect interest rates to rise, it may be a good idea to fix a new interest period during the interest rate reflection period. But if you expect interest rates to fall, it’s probably better to wait as long as possible before fixing your new interest rate.
Deciding between fixed-rate or variable mortgage interest
If you can’t decide between fixed-rate or variable interest for your mortgage, take a look at your financial situation and any future plans you have for your house. Arrange a free, no-strings-attached appointment with a mortgage adviser to learn more about the implications of your decision. The adviser can also compile a detailed mortgage calculation for you.
How variable interest is built up
Variable interest comprises five parts. Every part is variable and together they determine the level of the interest rate. If your variable interest rate changes, we will tell you which part or parts are responsible. Variable interest comprises:
- The basic rate
The amount we pay to procure money to finance mortgages - Surcharges relating to developments on the capital markets and capital costs
We pay a surcharge for procuring money for a longer term on the money and capital markets. We also incur costs for holding on to money. - Individual risk surcharges
We consider the relationship between the amount of the loan and the value of the property. This determines the rate category and risk surcharge on your interest. - Ongoing costs
We use part of the interest you pay to administer and manage your mortgage. - Profit
As a commercial company, we also use part of the interest to generate profits.
No variable interest
You cannot choose a variable interest rate with:
- Bank Savings Mortgage
- Savings Growth Mortgage
- Start Secure Mortgage
- Multi-Choice Mortgage
When your fixed interest period ends
Is the period you agreed with us over? Then you make new arrangements and can choose the same fixed interest period or a shorter or longer period. How much you pay then depends on:
- The fixed interest period you choose
- The interest rate at that time
Could you use some help with this calculation? Our mortgage advisors are happy to assist you.
Reasons for taking out a mortgage from ABN AMRO
Stay on top of your mortgage
Track your mortgage on Internet Banking or in the ABN AMRO app. It’s secure and easy.
Make changes to your mortgage yourself
From changing the interest rate to making additional repayments. Making changes to your mortgage couldn’t be easier. You can do it yourself online.
Videoconferencing with an adviser
Video Banking makes it easy. Simply use your computer, smartphone or laptop.