Unlike what occurs with fixed-rate mortgages, in the case of an adjustable rate mortgage the interest rate changes (usually from semester to semester) in relation to particular specific parameters, which are present in the contract signed by the applicant. In this case, the interest rate charged by the bank comes from two specific values: Euribor and the bank spread. The Euribor is a measure indicative cost of the credit institution must incur to acquire the money, it is a value related to the market and can not therefore be subject to any modifications by the bank. The spread is managed by the lending bank and is comparable to its profit margin. In general we observe that stipulates a greater spread for loans of longer duration, although this should not be considered a valid rule in all cases. It is proposed to follow a possible scenario: the Euribor equivalent to 2, 74% and a spread of 1, 35% will have a final rate that corresponds to 4, 09%. A possible increase in Euribor then lead to a higher interest rate: if the Euribor parameter was equal to 2, 94%, the rate of total interest payable to the bank would be equivalent to 4, 29% (2, 94% + 1, 35%).
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