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.
You received an inheritance, a bonus or money from selling a car? One of the most common questions: should you repay part of the mortgage?
When does early repayment pay off?
- The mortgage rate is higher than what you could earn in a safe investment.
- The fees are low – for example a prime track or a variable track at an exit point.
- There are no more expensive debts – if there is an overdraft or a high-interest loan, close those first.
- The payment is a burden and you want peace of mind.
When is it better not to?
- There is no safety cushion – emergency fund first, repayment later.
- A high capitalization fee that cancels out most of the savings.
- The mortgage rate is low – sometimes it is better to invest the money.
Which track to repay first?
- Tracks without a capitalization fee and with a high rate.
- Linked tracks – to stop the linkage. What is the CPI?
- Fixed tracks – only after checking the fee. Early repayment fees
Shorten the term or reduce the payment?
In a partial repayment you can choose: shorten the term (the payment stays the same, you save more interest) or reduce the payment (the term stays the same, the payment goes down). Shortening the term usually saves more.
Elia's tip: Repay a linked track between the 16th and the end of the month, and give written notice 10–45 days ahead. That saves two fees.
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.