The Supervisor of Banks has decided: The prime component of the mortgage will not be limited to one-third • Two-thirds of the loan composition will be subject to the selection of borrowers • MK Shlomo Kara'i: "Change also in the amount of the early repayment fee"
The Supervisor of Banks submitted a draft circular to the banking system, according to which it was decided to abolish the limitation of the prime interest rate component in the mortgage mix, and be content with limiting the variable interest rate, which stipulates that at least one third of the mortgage will be fixed interest.
The Supervisor of Banks, Yair Avidan, explained that "in light of the prevailing conditions in the market, we found it appropriate to remove the prime limit in the mortgage mix, thus facilitating the borrower public, while maintaining the required balances at the borrower and banking system. The financing options available to them. "
In the last decade, the Supervisor of Banks has taken a set of macro-stability measures in light of developments in the housing market.
Among other things, the Supervisor of Banks set restrictions on the share of the housing loan at a variable interest rate from the total loan.
The first restriction - the share of the loan in prime interest will not exceed one third of the total loan, and the second - the total share of the loan in variable interest will not exceed two-thirds of the total loan.
What's the big news? Questions and answers about the mortgage reform
Avidan explains that "in light of the extensive experience gained over the years, the developments in the housing market, and the analysis of the possible consequences of an increase in interest rates on borrowers' risk and risk in the housing credit portfolio, we found that mortgage borrowers can be eased." "The balances between the benefit to borrowers, while increasing the flexibility of taking out a mortgage, and the level of risk to which these borrowers are exposed and the level of risk in the housing credit portfolio in the banking system. This move may contribute to lower interest payments by borrowers."
"In a big line"
Discussions on the issue also included a discussion with Knesset members Dr. Shlomo Karai, Miki Levy and Yair Lapid.
According to MK Shlomo Karai, the big news is the expected change in the level of the early repayment fee. He said, "Today there are two steps: 20% after two years and 30% after 5 years.
According to the outline, an additional 50% discount level will be added after 8 years. "