Please note: advisory meetings and the service itself are provided in Hebrew only. These guides are here so you can read and understand the topic in your own language.
An any-purpose mortgage (משכנתא לכל מטרה) is a loan you receive against a lien on an apartment you already own. Unlike a purchase mortgage, the money can be used for anything: consolidating loans, renovation, helping your children, investment and more.
Why is the rate lower than a regular loan?
Because the bank has strong security: the apartment. So the rate is usually significantly lower than a regular consumer loan, and the term can be longer.
The limits
- Financing of up to 50% of the property's value, including the balances of existing mortgages on the same apartment. Financing limits
- Payment-to-income ratio – the same limits as in a regular mortgage. The PTI limit
- Term – up to 30 years.
When does it pay off?
- Consolidating expensive loans – replacing high-interest loans with one cheaper loan. Loan consolidation
- Renovating or extending the property.
- Helping your children with their equity.
The risk
- The apartment is pledged – if you do not make the payments, the bank can foreclose on it.
- Long spreading costs more – a 5-year loan that becomes 25 years can cost more in total, even at a low rate.
- Back into overdraft – if the root of the problem is not addressed, after a year or two you have both a mortgage and new loans.
Elia's tip: An any-purpose mortgage for loan consolidation only works with a new budget. Without a change in how you manage money, it only postpones the problem.
More: building a family budget.
This article is general information and is not personal advice or a commitment. Rules, interest rates and taxes change from time to time, so check the current situation and your own figures before any decision.