Mortgages in Israel

Israeli banks are still eager to lend money, 46.8 billion NIS in new mortgages were granted by banks in all of 2012, that's very close to the all time record of 47 billion in 2010. Israeli banks are very sophisticated and they offer a very wide variety of different loan packages, it is common to have a single home financed by an array of different loans including Dollar linked, Shekel linked Libor, Prime etc. Certain banks also offer loans linked to Japanese Yen or Euros.

While we are not experts in the field we can certainly highly recommend a number of extremely well proven professionals who can assist you in procuring finance for your home in Israel.

It's obviously crucial to work with a bank who will help you in your native tongue, it has been known that misdirected individuals have tried to negotiate their own mortgage in a foreign language only to have suffered as a consequnce, mortgage brokers are well worth their pay.

Here is a list of terms in Hebrew related to Mortgages that you might find useful:

Mortgage = Mashkanta = משכנתא

Monthly repayment = Hechzer Chodshi = החזר חודשי

Interest = Ribit = ריבית

Percentage = Achuz = אחוז

Survey = Shama'ut = שמאות

Loan = Halva'a = הלואה

Term = T'kufa = תקופה

Cash Down Payment = Hon Atzmi = הון עצמי

Principle = Keren = קרן

Foreign Currency Mortgage

A foreign currency mortgage is available in a number of the major currencies. The mortgage's interest is the LIBOR rate plus a fixed premium set by the bank. These mortgages are generally available up to 30 years and the repayment is in the currency that was borrowed, but can also be made in Shekels based on the exchange rate at the day of payment.

Dollar Linked Mortgage

A Dollar linked mortgage is a shekel mortgage linked to the dollar rate for a period of up to 30 years. The currency of loan and repayment is in shekels according to the dollar rate. The mortgage's interest is the LIBOR rate plus a fixed premium set by the bank.

Dollar Linked Mortgage in a protected interest rate

This mortgage is identical to the dollar-linked mortgage, except for the fact that the initial interest rate is fixed in the first 9 - 18 months. At the end of that period, the interest rate will be updated according to the LIBOR plus a fixed premium set by the bank.

Euro Linked Mortgage

Similar terms to dollar linked, except linked to the Euro. Most suitable to a person whose primary income is in Euros.

Bridge Loan

A loan extended to borrowers who own an apartment, for purchasing a property in the interim period until their previous apartment is sold. This is a short-term loan for a period of up to two years.

General Terms and Conditions

1. Depending on the bank the LIBOR rate may change every 3,6,9 or 12 months.

2. Most dollar-linked loans have the possibility of early repayment without incurring any major penalty or fee.

3. In some cases it is possible to arrange interest only payments up to a maximum of 2 years depending on the financial strength of the applicant.

Shekel Mortgages

A Shekel linked mortgage at fixed interest

A mortgage at a fixed interest rate linked to the consumer price index for a period of 4 to 30 Years.

A linked mortgage at variable interest

A mortgage at variable interest linked to the consumer price index, which can be spread over an extended period of up to 36 years - and thus making it possible to have lower monthly payments.

A linked mortgage at the Prime interest rate

A mortgage linked to the prime interest rate (based on the Bank of Israel's Rate) for a period of up to 25 years.

Israel has many banks to chose from when taking a mortgage and it is proven that shopping around for the best rates can save you a lot of money; here are the names of some banks in Israel who ofer mortgages, the list is not exhaustive and does not indicate that Rimon can recommend any of these banks.

Bank Mizrachi-Tefachot, Bank HaPoalim, Bank HaBenleumi, Bank Discount, Bank Mercantile, YuBank, Bank Poalei Agudath Yisrael, Bank Leumi, Bank of Jerusalem, Bank Igud.

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