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.
There is no single "winning mix." A good mix is one that fits you: your income, your plans, and how much risk you are willing to live with. The goal is to balance three things:
- A monthly payment that is comfortable for you today.
- A reasonable total cost over the whole period.
- Risk – how much the payment can move if interest rates or the CPI change.
The basic rule
Under Bank of Israel rules, at least one third of the mortgage must be at a fixed rate. The rest can be divided among variable tracks, including prime.
The building blocks
| Track | Advantage | Disadvantage |
|---|---|---|
| Prime | Flexible, early repayment without a capitalization fee | The payment moves with interest rates |
| Fixed, not linked | Full certainty | Higher rate, capitalization fee on early repayment |
| Fixed, CPI-linked | Lower rate | The principal grows with the CPI |
| Variable every 5 years | Exit points | Uncertainty every 5 years |
Three examples (for illustration only)
- Conservative – most of the mortgage in the fixed, non-linked track, with a small variable part. A stable but more expensive payment.
- Balanced – about one third fixed non-linked, one third prime, one third variable or linked. The common balance.
- Flexible – one third fixed, and two thirds in prime and variable tracks. Cheaper at first and more exposed to changes.
These are general examples only. The right mix depends on your own numbers.
Questions that shape the mix
- Planning to sell or repay within a few years? Then more flexible tracks.
- Expecting your income to rise? You can tolerate a variable payment.
- Is the payment already at the limit? Then more certainty.
- How many years? Different terms for different tracks can save a lot of interest.
Elia's tip: Ask the bank for a simulation of your payment in a scenario of a 2% rise in interest rates and 3% inflation. If the number scares you, the mix is not right for you.
Amortization method
The repayment method matters too: Spitzer (equal payments) or equal principal. Your advisor can show you both side by side.
Want to check your mix? That is exactly what we do in an advisory meeting.
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.