Mortgages are typically given for periods of up to 30 years and until age 85. Each track has advantages and disadvantages, so it’s important to understand the different loan options:
Linked to Bank of Israel interest rate, without early repayment penalties (except operational fee). Considered a very flexible track, but sharp interest rate increases could spike monthly payments.
Fixed interest rate for the entire loan duration, principal not indexed to inflation, and payments remain constant. A stable and secure track, but involves risk of early repayment penalties.
Fixed interest rate, principal indexed to inflation. Payments rise with inflation increases. Initial interest rate is lower, but over time payments may rise significantly.
Interest rate updates every few years (between 2-5), according to government bonds. Principal is not indexed to inflation. Risk of early repayment fees is lower compared to fixed tracks.
Principal indexed to inflation, and interest rate updates every 1-5 years according to bond anchor. This is a high-risk track, combining both inflation indexing and interest rate changes over time.
Special track for those without housing and new Olim, according to Ministry of Construction criteria. Principal indexed to inflation and interest rate is fixed and relatively low. A significant advantage is complete exemption from early repayment fees.
In this track, the loan is linked to foreign currency – dollar or euro – but actual repayments are always made in shekels, according to the representative exchange rate of the currency against the shekel on payment day.
Due to currency exchange rate and interest rate volatility, the foreign currency track is considered high-risk. It’s primarily suitable for foreign residents or borrowers with fixed income in foreign currency, creating natural balance between income and repayments.
Intended for purchasing new property before selling the previous property. Given for periods up to two years, usually with interest-only payments during the interim period.
Based on Bank of Israel short-term bonds, behaves similarly to Prime and is considered its substitute. No early repayment fees.
• 75% financing – Israeli citizens and residents purchasing a single apartment • 50% financing – Foreign residents and investors • Up to 85% financing – Through non-banking entities (insurance, financing funds, etc.)