Navigating The Israeli Mortgage Market 2024: What You Need To Know About Interest Rates


Israeli property investment is a major trend, and people are exploring different options to strengthen their position for a major investment. When you want to take this step forward, you must try out a new mortgage to ensure no finance-related issues later on.

If you want to enter the Israel real estate world, you can apply for a long-term loan to sort the finances. However, with so many offers, you should know about the mortgage rates in Israel to quickly begin the application process and make quick and meaningful investments.

Types Of Mortgages

You will come across two types of mortgages while planning to invest in Israeli real estate. The options available to you are variable-rate mortgages or fixed-rate mortgages.

The former stands for a mortgage loan in which there is a change in the interest rates based on the market conditions. However, the latter is an option where the interest rates remain constant for as long as the debtor does not repay the loan.


Malad Loan

When you contact mortgage and estate agents, you will see other options available.

The Malad loan refers to the one in which the capital loan amount is linked with the CPI of living in Israel. The goes with monthly adjustments and is based on the country’s current inflation rate. So, if you get through the advertisements, you will know that the Malad fixed applies to the actual interest rate. However, the principal and loan repayments will be adjusted for inflation.

Foreign Currency Loans

You have the option to choose shekels, euros, and the US dollar for your payments by the banks in Israel. Some banks can help you with the British Pound, the Swiss Francs, and the Canadian Dollar, amongst others.

The foreign currency loans are provided at variable interest rates based on the LIBOR rate. These loans are disbursed to the sellers in Shekels, and the monthly repayments should be made in Shekels. It should be paid based on the exchange rate on the payment day.

Bridge Loans

The next one is extended to borrowers who have a property like an apartment in Israel and want to purchase a property in the interim period until their already in-possession property does not get sold. The maximum period allowed for this loan is two years.


Interest-Only Loans

So, there are no interest-free loans. But, in some cases, you can apply for a short introductory interest-only period. After this, the loan gets automatically switched to a capital repayment track. The period for which this loan can be extended is two years.

Things That You Should Know

You should know some terms of the loan and also the potential risks attached to the same. The interest rates impact the monthly payments; hence, you should be careful whether to go for fixed or variable rates. Also, you need to check with the banking experts about the fees and penalties associated with the loan you wish to get. You should also have clarity about the prepayment penalties or late payment fees.

The mortgage process in Israel can take some time, and you have to work on various factors that can help reduce the process’s complexity. Hence, you should get in touch with a reliable professional that can help by giving you knowledge about the process and, at the same time, making you understand the steps involved in the process for a successful outcome.

Crucial Tips For Loans

You might have developed a fair idea about the Israel mortgage market, but here are some tips that can help in enhancing your understanding:

  • Before you begin the application process, you should know your credit score and history. It will help you understand your financial standing and the kind of mortgage you can qualify for.
  • When you plan to invest, you should begin saving. When you give a larger sum of money in the form of savings, you tend to borrow less; hence, the interest followed by the monthly payments will reduce.
  • You should focus on getting a pre-approval as it will help you know the amount you should borrow and the interest rate you are expected to pay against it.
  • You have to provide your financial information, so you should be true while doing it. You have to conduct market research to consider the kind of mortgage you want, which should also be from a reputable lender.
  • Also, you should not refrain from asking meaningful questions like queries related to the closing costs and see whether they fit your pocket or not.

Application Process

The application process is simple. You must render your financial information, like expenses, credit history, and income. Also, some documentary evidence requirements can be followed by the property papers of the place you want to buy. The documentation should include the purchase agreement followed by the papers needed to know about the property appraisal.

You have to apply. After you have submitted it, the functions of the lender begin.

They will evaluate the credit score and tell if you have qualified for the mortgage. When you get approval for the loan, details like the loan terms, applicable interest rate, loan period, and the monthly repayment you are expected to pay will dule be communicated to you.

Some mortgage figures applicable for 2024 that you should know are as follows:

Details Applicable Amount
Average mortgage size in Israel 1 million ILS
Average mortgage interest rate in Israel Around 3-4%
Average length of mortgage 25 years
Average down payment 20% of the property’s value approximately
Average monthly mortgage payment 4000-5000 ILS


The Israeli mortgage market 2024 is open for all kinds of investors and the mortgage options enhance the scope for people who are interested to take the first step in this field. You can seek the help of a mortgage broker or an experienced financial advisor for gaining a better market understanding and also, choose the options based on what you are interested in. Also, you should do research from your end so that you can apply your mind while making correct decisions.