Question 1

How much will the bank lend me?

Accepted Answer

For a first-time buyer who is either Israeli or lives in Israel, banks will lend up to 75% financing. Foreign residents and those buying investment properties are limited to 50% financing. If this is not enough for your funding needs, please speak to us to discuss creative solutions.

Question 2

Do I earn enough to qualify?

Accepted Answer

As a general rule, the banks like to see that your total net monthly income is not less than 3 times the mortgage monthly repayment. Income can include kollel stipends, unrealised company profits, dividends, capital gains, government stipends, etc. If you do not earn enough to qualify, it is possible to add a close relative as a co-signer to the loan.

Question 3

What is the maximum loan term?

Accepted Answer

30 years, but banks want the mortgage to conclude by the time the borrower is 80 years old, so clients over 50 years old will need to either take a shorter loan term, or add a younger co-signer.

Question 4

Can I avoid pre-payment penalties?

Accepted Answer

It depends. Variable rate loans have no pre-payment penalties. Fixed rate loans have a risk of pre-payment penalties, if the pre-payment occurs when market rates are lower than what you fixed at. Oftentimes, a mortgage must contain a fixed rate component, so whilst we can work to limit exposure to pre-payment penalties, we can’t always fully avoid it. To find out more information about pre-payment penalties, see this blog article.

Question 5

How long does the mortgage process take?

Accepted Answer

Securing a mortgage pre-approval can take anywhere from a few days to a couple of weeks. Once you have pre-approval, you are then able to sign a purchase agreement which will contain a payment schedule. It is best to leave about 6 weeks from signing the purchase agreement to needing mortgage funds.

Question 6

Do I have to be in Israel to obtain a mortgage?

Accepted Answer

No, all mortgage paperwork can be signed using a power of attorney.

Question 7

Can you help me open an Israeli bank account from abroad?

Accepted Answer

Yes!

Question 8

How much are the transaction costs involved in buying a house in Israel?

Accepted Answer

Click here to use our cost calculator.

Question 9

What interest rates can I get today?

Accepted Answer

Rates are constantly changing, and depend greatly on how you structure the loan. If you see someone advertising a specific rate either in print or online, be skeptical of how accurate the information is! Please be in touch with us and we’ll be happy to provide a detailed quote based on your specific needs and up-to-date market conditions.

Question 10

Can I borrow in foreign currency?

Accepted Answer

Yes, it’s possible to borrow US dollars, Euros, Swiss Francs, and British Pounds. For other currencies, please ask us.

Question 11

Do I need mortgage insurance?

Accepted Answer

You must insure the property against structural damage such as fire, water and earthquake damage. Usually banks also require an Israeli life insurance policy equal to the loan amount, but under certain circumstances we can secure life insurance waivers.

Frequently Asked Questions