The year 2023 will open with another respect for the mortgage holders:
tomorrow (Monday) at 16:00 the governor of the Bank of Israel, Prof. Amir Yaron, is expected to announce the level of interest in the economy.
According to most estimates, it will rise for the seventh time in a row in less than a year.
In the interest rate market, it is estimated that there are two possible scenarios: about 60% believe that the interest rate will rise by 0.5% to the level of 3.75%, and about 40% expect it to rise by 0.25% to the level of 3.5%.
Either way, this is a record since the 2008 crisis.
The expected price increases in the economy, photo: None
Against this background, the Bank of Israel aims to curb the increase in the inflation rate, which has reached an annual rate of 5.3%.
Estimates are that the Bank of Israel interest rate is expected to reach a level of about 4% in the coming year, but will decrease towards the end.
According to the Association of Mortgage Consultants, if the interest rate rises by 0.5%, the monthly repayment of the average mortgage in the amount of one million shekels for 25 years, of which 45% is in the prime route, will become more expensive by 131 shekels, and by more than 39 thousand shekels - the increase in the total cost of the mortgage.
Since the beginning of the year, the total increase in the price of the mortgage (about 45% of it in the prime track and 25% in the index-linked variable interest track) is estimated at about NIS 932 per month.
Meanwhile, Bank Hapoalim announced today that it will absorb the upcoming interest rate increase for "existing customers who may have difficulty making mortgage payments."
The step was taken against the background of public criticism regarding the bank's copy profits in the past year.
The benefit will be valid for one year for customers who meet criteria such as a financing rate of more than 60%, and more.
The bank estimates that it is about 10,000 customers, so the cost of the move will be a few million shekels at most.
Will he be able to make it easier for the citizens?
Smotrich at the first working meeting at the Ministry of Finance (archive), photo: Spokesperson of the Ministry of Finance
The business sector criticized the governor's expected decision.
According to them, the high interest rate makes it difficult for the business owners and forces them to pass on the increase in credit expenses to the customers.
"The Governor of the Bank of Israel should wait for the new finance minister, Bezalel Smotrich, and not raise the interest rate again," says the president of the Association of Chambers of Commerce, Uriel Lin, ahead of the interest rate announcement.
"The goal of raising the interest rate may be good, but along the way it seriously harms tens of thousands of businesses and hundreds of thousands of households."
According to him, it is forbidden to use the weapon of interest without at the same time carrying out a series of comprehensive reforms that will lighten the burden on the business sector and the general public.
Receiving criticism from the business sector, Governor Yaron, photo: Yehoshua Yosef
Price freeze?
The increase in the monthly repayment of the mortgage payments joins other price increases that went into effect yesterday, including increases in the electricity rate by 8.2%, the water rate by 3.5%, the property tax rate by about 1.4% and the price of fuel by 9 AJ per liter.
This is in addition to the rising prices of food products, cleaning and toiletries, and for some of the public also the rent.
Meanwhile, Finance Minister Bezalel Smotrich decided yesterday to cancel the taxes on disposable dishes and sugary drinks.
In the coalition agreements, it was also promised to freeze the "inflation generators", including electricity, water, property taxes, fuels and regulated products.
Except for fuel, services are paid every two months and you can still freeze them.
After many food companies raised the prices of their products in 2022, from the beginning of the week additional price increases came into effect.
Bassem asked to raise prices by an average rate of 3.4%, against the background of the rising costs of raw materials, packaging, energy and transportation.
These price increases will take effect in the coming days.
The company's product increase range is between 2.9% and 5.9%.
Basem also announced that they will increase the prices (for illustration), photo: Oren Ben Hakon
Thus, for example, ketchup, pasta, flakes, bread crumbs, soup almonds and soups will become more expensive by 5.9%, wild flakes and saber products by 4.9% and tivol products by 5.5%-4.9%.
Bezoglovac also asked to raise the company's prices by about 10% following the increase in the prices of chicken and turkey by the Farmers Union by more than 30%.
At Zemach Shan, which owns the Tov chicken brand, they were not left behind and decided to increase the price of some of its products by up to 15%.
Among the products that are expected to become more expensive: coated tilapia fillet, schnitzels coated with chips, chicken sausages and more.
On the other hand, most of the deli's products will not become more expensive, including pastrami, Italian sausage, and more.
It is important to note that a price increase for the consumer is not automatic, and the marketing chains can choose how they wish to treat the new price lists.
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