Elia RokachMortgage advice · Rehovot, Israel

A Mortgage for a Discounted Apartment (Dira Behanacha): What You Need to Know

How financing is calculated for a discounted apartment, why the required equity may be lower than expected, and the risks during construction.

2 min read · Updated: 2026-11-04 · By Elia Rokach, mortgage advisor · Translated from the Hebrew original

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.

Discounted apartment (דירה בהנחה, formerly "Mechir Lamishtaken") is a government program in which eligible buyers purchase a new apartment from a contractor at a reduced price after winning a lottery. Mortgages in the program have a few special rules.

Financing is calculated by value, not by the discounted price

In the program, the bank may calculate the financing ratio according to the market value of the apartment (according to an appraisal and subject to a ceiling set in the directives), not only according to the reduced price you paid. So the equity required is sometimes less than 25% of the price you paid. However, the program usually requires a minimum equity of a fixed amount. According to professional publications, the value ceiling for this calculation was updated during 2026, so check the current figure with the bank.

Payments during construction

The apartment is not built yet, so you pay the contractor in stages. The bank transfers the mortgage money according to the payment schedule. During construction you sometimes pay only interest on the amount already drawn.

The construction inputs index

Payments to the contractor are usually linked to the construction inputs index, in accordance with the law and the contract. A rise in the index makes the apartment more expensive. Buying from a contractor

Risks to watch

  • Construction delays – you will pay rent and interest at the same time.
  • Rate changes between the approval in principle and the actual drawdown.
  • Equity for the first payment – it needs to be available on time.
Elia's tip: Do not wait until you win to check financing. Check in advance how much you can borrow, so you can sign with confidence as soon as your turn comes.

More: how much equity you need, contractor financing deals.

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.
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