Israeli and non-Israeli citizens are able to obtain mortgages from commercial banks in Israel. Beyond commercial loans, Israel, Israel offers two types of mortgages, both backed by the government. One of them — mashkanta — is available to citizens who didn't own residential property as of 1 June 1972. The other type — the so-called local subsidy — is available to both Israelis and foreign citizens who wish to purchase property in certain areas that are generally not industrially developed and lack mature infrastructure.

Foreign mortgage loan terms in Israel (December 2016)Source: Damida Estate, Tranio´s partner in Israel

Maximum LTV ratio 50% (for residents: 75%)
Minimum and maximum loan amounts
Fixed rates 3-3.5% p.a.
Loan term Up to 30 years
Minimum age of borrower 18
Maximum age of borrower by the end
of the loan term
Not defined (depends on the terms
of each bank)
Maximum percentage of monthly income
for mortgage
33%

Documents

Prospective borrowers need to submit the following documents to Israeli banks:

  • passport
  • guarantors' passports (if needed)
  • tax returns for the two previous years proving annual income
  • extract from the Land Register (issued no less than six weeks in advance)
  • property documents.

All the papers must be drawn up in Hebrew or English and notarised.

Loan applications usually take 1-2 weeks for approval.

Additional costs

Additional mortgage costs in Israel typically don’t exceed 1,000 Israeli New Shekels (ILS*) ($300).

Additional mortgage costs in Israel (November 2016)Source: Damida Estate, Tranio´s partner in Israel

Property appraisal and Due Diligence About 600 shekels
Borrower's life and property insurance Several hundred shekels
(depends on individual terms)
Mortgage arrangement fee Several dozen shekels

*1ILS=0.26 USD (as of early December 2016)

 
 
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Alexandru-Viorel Hincu
Property Advisor
+44 20 3608 1267
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