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.
In recent years many contractors have offered financing deals: you pay a small part of the price at signing (for example 20%) and the rest only at handover. There are also "contractor loan" deals and subsidies of the mortgage interest.
Why do contractors offer this?
To sell apartments when the market is slow, and to attract buyers who cannot pay much during construction.
Advantages for the buyer
- Fewer payments during construction – no need to pay a mortgage and rent at the same time.
- Protection from the index – in some deals the large payment is not linked, or is only partly linked.
- Time – to save more equity until handover.
Where is the "price"?
- The apartment price – sometimes the cost of the deal is built into the price. Compare with the cash price and with similar apartments.
- Risk at handover – if at handover the rate is high, the appraisal is low or your income has dropped, the mortgage may be hard to obtain.
- A commitment to raise a large amount all at once.
How to check
- Ask for the cash price and compare.
- Check whether you have an approval in principle for the amount you will need at handover.
- Read the linkage clauses. Buying from a contractor
- A worst case – what if rates rise by 1.5% by handover?
Elia's tip: A financing deal is not necessarily a discount. Always ask: "How much does the apartment cost if I pay the regular way?" The difference is the real price of the deal.
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.