Mortgage
Frequently Asked Questions
What is MOrtgage (Mishkanta)?
A mortgage is a long-term loan provided by a bank or lending institution to help you purchase a residential property. It is typically repaid over many years through monthly installments that include both principal and interest.
What are the main types of mortgages in Israel
- Subsidized Mortgage: Offered with improved terms through the Ministry of Housing for eligible groups.
- Commercial Bank Mortgage: Offered directly by banks under the regulations of the Bank of Israel.
Not all subsidized mortgages are better. Your mortgage advisor can help you compare
How much mortgage can i get?
According to the rules of the Bank of Israel:
- First and only home: Up to 75% of the property’s value
- Replacement home (second home while selling the first): Up to 70%
- Investment property (second or more, keeping the first): Up to 50%
How do I decide how much i can afford?
You need to consider the total cost of the property, your available capital, monthly income, existing expenses, and future financial plans. The mortgage repayment cannot exceed 40% of your household income.
Should i sign a purchase agreement before mortgage approval?
No. Always check if the bank will approve your loan and under what conditions. Different branches of the same bank may offer different terms. A mortgage advisor can help you choose the right branch and prevent costly mistakes.
What are the main loan repayment plans?
Spitzer: Monthly payments are usually equal if the interest rate is fixed. However, if the loan is linked to inflation, or has a variable interest rate, monthly payments can change over time.
Equal Principal: You pay a fixed amount of the principal each month plus interest on the remaining balance. Payments start higher and decrease steadily as the principal reduces.
Balloon: You pay only the interest during the loan period, with the full principal due at the end. This can be risky and is typically used in special cases or short-term loans.
Mixed plans: Many mortgages combine several repayment types and interest tracks (fixed, variable, inflation-linked) to suit your personal needs and risk tolerance.
We guide you in selecting the best repayment plan tailored to your financial goals.
what is a mortgage pre-approval?
It’s a non-binding confirmation from the bank that, based on your current documents, you are likely to be approved for a mortgage. However, the final approval depends on accurate documentation and the legal status of the property.
What documents do i need to apply for a mortgage?
The full list of required documents always depends on your employment status and the specific requirement of the bank, but among the main documents typically requested are:
- ID and proof of residency
- Recent payslips or proof of income
- Bank Statements (usually last 3-6 months)
- Property purchase agreement (if available)
- Details of any existing loans or financial obligations
What is a property valuation (appraisal)?
The bank requires a licensed appraiser to assess the real market value of the property. This affects how much the bank is willing to lend. A low appraisal can impact your financing plans, so timing and accuracy are crucial.
What additional costs should i expect when buying a home?
When buying a home, there are certain additional costs you need to consider, including:
- Property purchase tax
- Appraisal fees
- Legal fees
- Life insurance (mandatory)
- Home insurance (mandatory)
- Registration and administrative fees
What does a mortgage advisor charge? Is it a percentage of the loan or a fixed fee?
Mortgage advisors usually charge a fixed fee. The exact rate depends on the advisor and your agreement, but it’s important to clarify this upfront so you know what to expect. Working with an advisor often saves you more than their fee by securing better loan terms.
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