High-interest rates haven’t cooled the market. In June, the public received mortgage loans amounting to NIS 11.9 billion, an increase of 2.5% over June 2021.
Dec. 14, 2020
Amid continued signs that the residential real estate market is heating up, the Bank of Israel announced on Monday it was ending its ceiling on the portion of mortgage rates linked to the prime rate, a move seen as spurring even more demand by home buyers.
Under the new rules announced by the supervisor of banks, the Bank of Israel will only require lenders to set a third of a new home loan at a fixed rate of interest. The rest of the loan can be set at whatever interest rate option the borrower asks for.
Since the prime rate right now is so low, that will become the default option for borrowers and make taking out a home loan more attractive than before.