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The battle for the house: the complete guide to mortgages Israel today

2022-11-26T19:32:23.839Z


Stop the interest rate, I want to lower it: the raising process is not over yet, and it's time to look for somewhat creative solutions • What do you do when there is a fear that the payment will return? Which route should I take? And which bank offers the cheapest mortgage today? • All answers to all questions


And I wish it was all up to here: last week the Bank of Israel raised the interest rate for the sixth time in a row since the beginning of the year to a level of 3.25%.

The governor's decision raises the prime interest rate from 4.25% to 4.75% and increases the mortgage repayments to the public by hundreds of shekels, thus drastically burdening households.

And whoever thought that the interest rate is close to the peak, is wrong.

According to Deputy Governor Andrew Abir in a conversation with "Israel Hayom" last week, the process of the increases has not yet ended.

Precisely for this reason, and with the help of the chairman of the professional committee of the Association of Mortgage Consultants, Jonathan Berliner, we have prepared a complete guide to mortgages for you.

Banknotes (illustration), photo: Dodo Greenspan

These are the possible solutions

I take out a new mortgage - which bank offers the most affordable mortgage today?

The cheapest banks today are Bank Leumi and Bank Hapoalim.

In the results of the last quarter, for the first time, Bank Leumi overtook Bank Hapoalim in market share.

Along with the sharp drop in the performance of the entire system, a war was opened for every customer.

This shows that sometimes even in business entities respect is no less important than money, and this time the ones who profited are the consumers.

My advice to those who take out a mortgage these days: today there is tremendous competition between the big banks for market share, and it is not certain that this competition will continue with the same intensity at the beginning of next year.

I'm afraid I won't be able to meet the monthly repayments - what do I do?

The group most severely affected by the increase in interest rates is people who have both loans and mortgages, households who have a mortgage and a car loan or another supplementary loan.

If the increase in the monthly repayment makes daily conduct difficult and there is difficulty in paying the loans, the guiding rule is not to reach a situation where the monthly payment returns.

Mortgages taken in the past should not be refinanced - anyone who refinances today will receive less favorable terms.

So what is still recommended to do?

Some banks (Hapoalim, Discount) allow customers to extend the loan period without compromising the interest rate terms.

This can be a great solution for this group - it will lower the amount of the monthly payment and will not affect the terms of the basic interest rate of the loan.

Bank Hapoalim also makes it possible to return the situation to normal in the future, and you just have to remember that when the interest rate goes down in the future you have to "shorten" the mortgage back.

Also, in some banks (Poalim and Leumi) it is possible to take a "vacation mortgage", or "Grace", in the middle of the life of the loan.

This is a one-time solution for one month or three months and it does not affect the terms of the loan and the credit rating.

Jonathan Berliner,

Those who do not have these options and expect not to meet the monthly repayment, should do everything possible so that the monthly payments do not return.

You can consider the possibility of taking an additional loan.

I really don't like this solution, but if it is measured and to the point, then it is possible.

Also, you can check the possibility of recycling.

It is also possible to freeze the mortgage, but this damages the credit rating.

Beware of loans

And if I'm not afraid that the payments will return, but still the increase in price makes it difficult for me?

People who are bothered by the increase in the monthly repayment, but there is no fear that they will not meet the payments - for them my advice is to "bite your lips hard".

As we said, those who took out a mortgage in the past - it is not worth refinancing.

I have free money in the checking account - is it recommended to close part of the mortgage?

Definitely.

There is no reason to keep the money in a checking account. If I can pay off NIS 100-150 thousand and lower the monthly repayment by NIS 700-800, that's better.

I took a supplemental mortgage loan from a training fund and the repayments jumped - what should I do?

Another group is people who took a supplemental mortgage loan at the expense of a continuing education fund - they feel the increase in the monthly repayment the strongest, because of the type of loan in the continuing education fund.

My recommendation in this case is to pay off the loan.

It is very unacceptable to have expensive credit to invest in the stock market. 

I'm taking out a new mortgage - which route should I check?

The emphasis in the negotiations should be placed on a route with a non-linked fixed interest rate.

Even if the interest rate on the prime route is high, make sure that the interest rate on the KLC is low, aim for 4.5%-4.8% and try not to exceed 5%. Those who plan to pay off or refinance the mortgage in the near future, it is recommended to avoid index-linked routes.

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Source: israelhayom

All news articles on 2022-11-26

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