Tasso Fisso (Fixed Rate)

An interest rate on a mortgage or loan that remains constant throughout the entire loan term. A mutuo a tasso fisso will have the same interest percentage every year, regardless of market fluctuations. This means the rata (monthly payment) is typically fixed as well (assuming standard amortization). Borrowers often choose fixed rates for stability and predictability. The fixed rate applied is determined at the start, influenced by the IRS index (Interest Rate Swap for the loan’s duration) plus the bank’s spread. For example, a 20-year fixed loan might have a rate of 2% locked in, so one pays 2% interest from first to last payment. Even if Euribor or other indices change, it does not affect a tasso fisso loan. Generally, if market rates are expected to rise or one’s budget can’t handle uncertainty, fixed is preferred. The disadvantage could be a higher initial rate than a variable loan or possibly paying more interest if market rates stay low. In Italy, fixed-rate loans have been very popular in recent low-rate years (over 80% of new loans). A notary will mention in the deed the type of interest (fixed vs variable). Note that if you want to change, you can surrogate (refinance) into a new loan if advantageous. Also, some loans called tasso misto or tasso variabile con cap have fixed components or maximums, but a true fixed rate means unchanging.