Mortgages

Mortgages

First Time Mortgage

One can borrow up to 75% of the value of the property being purchased.

Second Property Property Mortgage

One can borrow up to 50% of the value being purchased.

Property Refurbishment or Expansion Mortgage.

Once can borrow up to 60-75% of the value of the property to expand or refurbish the property.

Mortgage for any Purpose

Do you need money urgently ? Maybe for a Simcha, such as a bar-mitzva or wedding, or for a down payment for one of your children’s new home, or want to travel abroad. You can borrow up to 50% of the value of your property.

Mortgage Refinancing 

You are currently have a mortgage, but you want to take advantage of the current lower market rates. so we will find another bank that will offer you a lower monthly rate, and that will complete the mortgage at a shorter term.

 

There are in essence about 32 different mortgage programs and combinations but i will list the main ones below :

Fixed Shekel Mortgages not linked to the Consumer Price Index

These fixed interest mortgages are not linked to the CPI and they remain fixed throughout the term of the mortgage.  The monthly mortgage repayments remain fixed and there is a an early repayment penalty if the mortgage is repaid early. The rates are normally higher as the rates are fixed throughout the mortgage term.

Fixed Shekel Mortgage Linked to the Consumer Price Index

With this mortgage option the principal is linked to the CPI. The interest rate remains fixed throughout the mortgage term whereas the principle is linked to the CPI. This linkage to the CPI will cause fluctuations in the monthly pay back of the loan depending on the changes in the CPI.

Shekel Mortgage linked to the Prime Rate

This mortgage is based on the Prime Bank of Israel Rate currently at 0.25%. The banks add a  rate of 1.25%, and then they can offer a discount of  up to -0.75%. This rate will fluctuate depending on the bank of Israel’s decision to increase of lower the Bank of Israel Rate. This is normally determined by the Consumer Price Index. The aim of the Bank of Israel is to have an annual CPI of 1 to 3%. If the CPI is higher or lower than the banks will adjust their rates accordingly to maintain the CPI at that level.

Variable Mortgage Linked to the Consumer Price Index

This rate is determined by bond rates and the bank’s added interest rate. This rate is a variable rate mortgage for different periods of 1 year, 2 years , 2.5 years, 3 years or 5 years. The rate will remain fixed for the period chosen, and what will change at the end of the period is the bond rate and not the interest rate. The interest rate remains fixed throughout the term. The interest rate is normally lower than the fixed rate mortgages, but it  potentially can fluctuate at the end of the different periods because it is linked to the CPI.

Variable Mortgage not linked to the Consumer Price Index

This rate is also determined by bond rates and the bank’s added interest rate. This rate is offered for a period of 5 years. The interest is fixed for 5 years, and what changes is the bond rate and not the interest rate. The interest rate remains fixed throughout the mortgage term. The bond rate will change every 5 years.

Foreign Currency Mortgage 

The interest rate is linked to one of the following foreign currencies

The US Dollar, the Euro, Swiss Franc, and the Japanese Yen.

The rate is linked to the LIBOR rate which changes every 3 or 6 months or sometimes every year.

This mortgage option is good for people who earn their income in a foreign currency or for foreign residents. The rate is not linked to the CPI but to the foreign currency. There are no early pre-payment penalties, and the rate is higher than the prime rate.