On the way to a decision:
Today (Monday) at 16:00, the Bank of Israel will announce the level of interest rates in the economy, and according to most estimates, will raise it by 0.25% to a level of 0.6%.
According to some estimates, the interest rate may even rise by 0.4%, to a level of 0.75%.
Raising interest rates will increase the cost of mortgages and other loans, and will dramatically affect the rental market.
This is because apartment renters expect rent payments to cover mortgage payments, and as soon as these rise, the cost rolls over to tenants.
Added to this is the jump in apartment prices, which completed a rise of more than 16% in the past year.
As first reported in "Israel Today", the prices of apartments for rent are soaring at a disproportionate rate of about 30%.
In the interest rate market, it is estimated that the interest rate in the economy will increase starting each month in each decision, and the only question is what rate it is.
It will be recalled that in his previous announcement, the Governor, Prof. Amir Yaron, stated that in the coming year the interest rate is expected to reach a level of 1.5%.
The main purpose of raising interest rates is to curb inflationary pressures, and to cool the boiling housing market.
According to Jonathan Berliner, Deputy Chairman of the Association of Mortgage Advisors, "The expected interest rate increase is different from what we know from the past, in accordance with the Bank of Israel's statement in the previous increase that the interest rate is 1.5% by the end of the year.
This means that the interest rate will remain high in the future as well. "
Berliner adds that "combining a high-amount mortgage along with high interest rates creates a significant commitment and risk for many households."
In his estimation, "the monthly repayment of a new mortgage is about 830 shekels higher than the mortgage taken in 2021, and the continuation of the trend will force many households, especially low-income households, to give up buying the apartment."
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