Understanding Mortgage Rates in Israel 2024: A Comprehensive Guide

If life takes you to Israel, learning as much as possible about mortgages and the conditions surrounding them in time might be good. The rules seem to change depending on the interest, so all challenges must be clarified in time in order to take appropriate actions.

So get ready, as we have a very detailed guide on understanding these challenges. Of course, you can always get information on various services for additional information, for example, https://www.evensapir.co.il/.

But let us return to our topic.

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In 2024, in Israel, two basic types of mortgages are most often used.

1. Variable-Rate Mortgages

It is about variable interest rates that depend on the current market situation. This means that your monthly expenses, i.e., payments, may increase or decrease depending on market interest rates. In general, this option is pretty flexible but also unpredictable for many.

That’s why fixed-rate mortgages are even more popular, because you know the conditions, and you’ve accepted the rates at the moment you sign up for the loan.

2. Fixed-Rate Mortgages

Fixed rates mean that you pay the same monthly amount no matter what the market is like. This is great for those who plan their expenses in advance and pay more attention to household budgeting.

What may not be in favor of users is that interest rates can be quite high, although the market situation dictates new conditions for loans. It is also negative that if you manage to repay the loan early, the bank may charge you penalties.

However, we must emphasize that there are additional types of mortgage rates in Israel, which are much less common among users. So, in addition, we have:

3. Semi-Fixed Rates Mortgages

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This happens when you have a fixed interest rate for a certain period of your mortgage, and then you can switch to a variable one. Let’s say, for the first five to ten years, you have a fixed interest rate, and then when that amount has already been paid, you can agree with the bank on a more flexible interest rate.

Although this is not a common choice, those who pay off their mortgage this way find that it offers great flexibility in planning their finances and is great when they are facing some financial challenges.

4. Index-Linked Mortgage Rates

This is a variation of the variable mortgage rate in Israel. In certain situations, mortgage rates may depend on Israel’s cost of living index. For example, if the country is facing inflation, then banks can adjust mortgage rates accordingly to that index.

This means that regardless of whether you are on a fixed, semi-fixed, or variable rate, the amount is adjusted to the current capabilities of the population. But keep in mind that in certain conditions, this is a mitigating factor, but there are also situations in which it can make the individual financial obligation of some users more difficult.

Useful tips about Israeli Mortgages

Source: buyitinisrael.com

In order to get a mortgage in Israel, you must meet certain conditions. Let’s say you must always be aware of your credit score and credit history. Therefore, check the situation with your finances and your so-called reputation as a credit user so that you can use the opportunity accordingly.

Additionally, we recommend that you be responsible with your finances and save as much money as possible for monthly payments. The general advice is to have savings of at least 20% of the property you buy. That way, even if you come into a financially difficult period, you can rely on the savings.

And what we want to emphasize is to choose a reputable lender. Of course, you will find many offers, and it may be difficult to choose the really good one, but you have to make an effort because it is a seriously big loan for which you have even more responsibility in the future.

Additionally, we would advise you to cooperate with a financial advisor, who will help you determine which type of mortgage or rate suits you best. Inform yourself about closing costs in case you can repay the debt earlier than the stipulated term.

And, of course, read the contracts so you know what terms you agree to, so you don’t have any surprises in the future.

Stats & Figures to Know for Israeli Mortgages

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Now, we have reached the final and perhaps the most interesting part of this text. It’s time to summarize the numbers, that is, the relevant data valid for 2024.

So, the average mortgage size in Israel is about one million ILS or just over 270K US dollars. At the same time, the average mortgage interest rate is around 4%, while this type of loan is taken for around 25 years.

The percentage of home ownership is about 70%, while the average age of first-time homebuyers is late 20s and early to mid-30s. Israel is estimated to have at least 20 mortgage providers and around 60% of users opt for fixed rates.

In general, an average mortgage borrower in Israel earns a monthly salary between 20K-25K ILS, and the downpayment for a home in this country is 20% of the property’s value. With that, we arrive at the figure that the average monthly mortgage installment in Israel is around 5000 ILS.


Based on everything we have said, it seems that mortgage users in Israel have quite favorable conditions. The fact that quite a few young people can still buy their own homes says enough that the quality of life is at a satisfactory level.

And when it comes to buying your own home, whether it is a house or an apartment, we must be especially careful. Know your financial possibilities at any moment and go for options that will help you pay off the debt efficiently. Of course, choose the rate based on what suits you best.

And if you’re buying or planning to buy a home soon, we wish you success in your endeavors because there’s nothing better than enjoying your own apartment and being independent of rents and similar housing challenges.