• news

• News in Israel

Relief for mortgage holders: The Bank of Israel abolishes the prime interest rate limit

This means that now two-thirds of its mortgage can be linked to prime interest, the cheapest interest rate in the economy.

This is a saving of hundreds of shekels for households every month, however, this is an interest rate characterized by high volatility.

Bank of Israel: "Need that sharpens during the Corona crisis"

Tags

• mortgage

• Mortgages

• Bank of Israel

Sonia Gorodisky

Monday, 14 December 2020, 18:13

• Share on Facebook

• Share on WhatsApp

• Share on general

• Share on general

• Share on Twitter

• Share on Email

0 comments

• The reception for Shira Isakov, who was seriously injured by her husband's stabs ...

• Netanyahu welcomes normalization agreement with Sudan: ...

• The Houthis attacked oil tankers in Saudi Arabia with cruise missiles ...

• Police evacuated a protest statue set up near Balfour;

  The artist ...

• US History: Pfizer's First Corona Vaccines ...

• Handel and Hauser join the storm: "Netanyahu has done his part ...

• Statements by Netanyahu, Ganz and Edelstein in Tel Hashomer with ...

• A resurgence in the Arab sector: "The Ministry of Health blames ...

• Killed and two seriously injured in an accident in the lowlands 12.12.20

• Netanyahu: Apparently we can bring forward the vaccinations ...

• Corona vaccination campaign in the US: The medical staffs ...

• The rabbis in Bnei Brak were asked to issue a public reading ...

In the video: Bank of Israel press conference on interest rates (Photo: L'Am, edited by Assaf Drori)

The Bank of Israel has decided to abolish the limit according to which it is possible to take up a third of its mortgage at prime interest rates and be content with limiting the variable interest rate, which stipulates that at least one third of the mortgage will be given at a fixed interest rate.

The move means that now two-thirds of its mortgage can be linked to prime interest, the cheapest interest rate in the economy.

This is a saving of hundreds of shekels for households per month, however the risk to borrowers will be greater, because this is an interest rate characterized by high volatility.

The prime interest rate is the Bank of Israel's interest rate, which currently stands at 0.1% plus 1.5%.

Since June 2011, prime interest rates have been declining from 4.75% to their current level of 1.6% in recent months.

It can be assumed that the Bank of Israel does not anticipate an increase in interest rates in the near future, and therefore prefers to facilitate households by lowering the monthly payment on the understanding that the chance of an interest rate rise is relatively low.

In the last decade, the Supervisor of Banks has taken a series of steps to stabilize the housing market, which has been characterized by a sharp rise in prices.

In order to slightly cool the demand for mortgages and also to reduce the risk of borrowers, among other things, the Supervisor of Banks has 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.

Now as stated, the first restriction will be abolished.

More on Walla!

NEWS

Poorer, students and those without a matriculation certificate: Unemployed in the second closure

To the full article

More on Walla!

NEWS

• The Bank of Israel publishes a new outline for deferring small business loans

• Former Finance Ministry director general Yossi Bachar has died at the age of 65

• Returning to Istanbul: A travel diary with a group of hair transplant recipients

"This move may contribute to lowering interest payments paid by borrowers."

Bank of Israel (Photo: Reuters)

The Bank of Israel explained the decision today: "In light of the extensive experience gained over the years, developments in the housing market, and analysis of the possible consequences of rising interest rates on borrowers' risk and risk in the housing credit portfolio, we found that mortgage borrowers can be eased." "While maintaining the balance between the benefit to borrowers, increasing the flexibility in 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 paid by borrowers."

Discussions on the subject included a discussion with members of the Knesset Mickey Levy, Yair Lapid and Dr. Shlomo shreds. The proposed amendment circulated today Advisory Committee, Banking, and after hearing comments and the comments of the public, will be formulated terminal guidance within a few weeks.

According to the Supervisor of Banks, Yair Avidan, "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 level of the borrower and the level of the banking system.

The current step will make it easier for the mortgage takers and increase the variety of financing options available to them. "

• Share on Facebook

• Share on WhatsApp

• Share on general

• Share on general

• Share on Twitter

• Share on Email

0 comments