Types of mortgages

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There are a number of mortgages available from the banks in Israel. The following is a brief summary of some of the most popular mortgage options. Each mortgage is designed and suitable to a particular client depending on a number of factors, including but not limited to: Currency of income, place of residency, financial goals, economic outlook and economic standing.

Most mortgages offered in Israel are variable and are linked to either the LIBOR rate, inflation rate or some other index. However, recently a few banks have offered fixed rate loan products up to a maximum of 20 Years.

View Libor tutorial

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 25 years and the repayment is in the currency that was borrowed.

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 32 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.

 

This Article Was Written By  Mortgage Israel Company.

For Advice And Further Details –   www.mortgageisrael.com

Mr. Avraham Mahler   amahler@mortgageisrael.com   052- 734 6327

ISR. +972-2-624-0299   USA. +1-212-444-1537    UK. 44-208-150-0732

Companies have been chosen for their knowledge and reputation. NadlanPrime does not take any responsibility for any service or advice.

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