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"A step that will help 40,<> households": Bank Hapoalim announces that it will absorb the increase in mortgage interest rates | Israel Hayom

2023-05-21T09:18:22.080Z

Highlights: Bank Hapoalim announced a move aimed at enabling its customers to cope with the increase in mortgage repayments. This is not a loan, but rather a benefit for bank customers who meet the criteria defined at an estimated value of NIS 1000,<>. The cost of the move is estimated at tens of millions of shekels per bank. The move is valid for one year for more than 40,<> households with an existing mortgage at the bank that includes a prime track.


The bank announced a move aimed at enabling its customers to cope with the increase in mortgage repayments • This is a benefit for bank customers who meet the criteria whose value is estimated at NIS 1000,40 • Its cost to the bank is estimated at tens of millions of shekels • Bank Hapoalim's CEO: "We have made a decision to take a proactive step that will help over <>,<> households, proud to be the first to do so" • All the details


Following the Bank of Israel's recent interest rate increase: Bank Hapoalim announced today (Sunday) a move aimed at enabling its customers to cope with the increase in mortgage repayments.

The Bank announced that it will absorb again for a year the next interest rate increase by the Bank of Israel, which will be published tomorrow, so that the monthly repayment in the prime track will not be affected by this increase in the interest rate, and the prime interest rate will remain unchanged for them. This is not a loan, but rather a benefit for bank customers who meet the criteria defined at an estimated value of NIS 1000,<>. The cost of the move is estimated at tens of millions of shekels per bank.

Ariella Randlstein, head of Bank Hapoalim's mortgage department, explains in a conversation with Israel Hayom: "Today, the prime interest rate is 6%, if tomorrow it rises to 6.25%, then the customer will continue to pay in the coming year at the 6% interest rate, in accordance with the interest rate mechanism he has. The bank won't back it up in the future."

Bank Hapoalim will absorb the interest rate increase in Israel, Bank of Israel (archive), photo: Oren Ben Hakon

It should be noted that if there are additional interest rate increases during the benefit period, which, as stated, will last for a year, beyond this interest rate increase, they will apply to the monthly repayment. If during this period the interest rate in the economy is reduced, the reduction will be reflected in the monthly repayment.

40,<> households

At the end of the benefit period, starting in July of next year, the monthly payments in the prime loan track will bear the prime interest rates as they will be from that time, according to the loan contract. The move will be carried out automatically by the bank and customers who meet the criteria will receive mailings from the bank on the subject.

The move is valid for one year for more than 40,<> households with an existing mortgage at the bank that includes a prime track (and relates to it only), who meet all of the following criteria:

• Customers have one property pledged to the bank in respect of the mortgage • The financing rate is over 60%
• The total balance of the existing mortgage
is less than NIS 1.5 million as of the end of April 2023
• The loan is paid without arrears

According to the Bank's examination, these criteria usually relate to customers holding a first home with an average mortgage (including young couples who purchased their first apartment) – who were significantly affected by the increase in interest rates. For these customers, the change will be applied automatically and they will be notified by the bank on the matter.

Bank Hapoalim's CEO, Dov Kotler: "As the bank leading the banking system in Israel, we have decided to take another proactive step and once again freeze the increase in the interest rate, for over 40,<> households that in our assessment have suffered the highest price increases in recent times.

"At the beginning of the year, we announced that we would continue to provide our customers with additional solutions to deal with the increase in the monthly repayment, and we are proud to be the first in the banking system to embark on this series of moves for the benefit of our customers."

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Source: israelhayom

All news articles on 2023-05-21

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