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.
The Bank of Israel requires that at least one third of every mortgage be at a rate fixed for the whole period. Until the end of 2020 there were additional limits, for example that prime could not exceed one third, but these were cancelled. Today you can divide the remaining two thirds among the tracks as you wish.
Which tracks count as "fixed"?
- Fixed, non-linked – the fixed non-linked track
- Fixed, CPI-linked – the fixed linked track
A "variable every 5 years" track does not count as fixed, even though its rate does not move for 5 years.
What does it mean for you?
- You cannot take a mortgage that is entirely in prime.
- You can take up to two thirds in prime, but that does not mean it is right. The prime track
- The fixed third should be built wisely: linked or not linked, and for what term.
Choosing the fixed third
The main question is between fixed linked (a lower rate, but the principal is linked to the CPI) and fixed non-linked (a higher rate, but full certainty). There is no single right answer. It depends on inflation expectations, the term and how much certainty you need. How to build a mix
Elia's tip: In the fixed part, a shorter term can save a lot of money, and also reduce the capitalization fee if you want to repay early.
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.