The prime rate is the Bank of Israel rate plus 1.5%. As of October 21, 2026, the Bank of Israel rate stands at 3.25%, so prime stands at 4.75%. In a mortgage, the prime track is defined as "prime plus" or "prime minus" a margin agreed with the bank.
How does it work in practice?
Suppose you received prime minus 0.5%. Today your rate is 4.75% − 0.5% = 4.25%. If the Bank of Israel cuts its rate by 0.25%, your rate drops to 4.0%, and your monthly payment goes down as early as the following month. If the rate rises, so does the payment.
The advantages
- Full flexibility – you can repay this track at any time, usually without a capitalization fee.
- Not linked to the CPI – the principal does not grow because of inflation.
- You benefit from rate cuts – immediately.
The risk
Interest rates can rise, and sometimes quickly. In 2022–2023 the Bank of Israel rate rose from 0.1% to 4.75%, and many families saw the payment on their prime track jump significantly. This is the main risk: you do not know what your payment will be a year from now.
How much prime can you take?
Under Bank of Israel directives, at least one third of the mortgage must be at a fixed rate. That means up to two thirds can be in variable tracks, including prime.
When does prime fit?
- When you expect early repayment (a sale, an inheritance, a bonus).
- When you have room in your budget to absorb an increase.
- As part of a balanced mix, not as the only track. How to build a mix
Current figures are always on the rates and indices page (in Hebrew).