Introduction: What Makes This Guide Different
Most mortgage guides explain what Prime rate is and the difference between banks. That is not enough for newcomers to Israel.
At RealFix, we have been helping clients since 2008. We have seen crises, opportunities, and how well-structured mortgages survive market shocks - and how poorly structured ones collapse. This guide gives you strategy, not just information.
Special Note for New Olim
Your credit history from abroad does not transfer to Israel. The BDI (Israeli credit bureau) starts fresh. This can be both a challenge and an opportunity. Banks will evaluate you based on your Israeli income, savings, and employment contract.
Chapter 1: Israeli Mortgage Basics - Key Terms Explained
Before diving into strategy, let us translate the key Israeli mortgage terms into concepts you will recognize:
LTV (Loan-to-Value) Limits in Israel
- • First home: Maximum 75% LTV (you need 25% down payment)
- • Investment property: Maximum 50% LTV
- • Second home: Maximum 50% LTV
- • Upgraders: 70% LTV (if selling your current home)
PTI (Payment-to-Income) Ratio
Your total monthly debt payments cannot exceed 40% of your net income. This includes the mortgage, car loans, and any other debts.
Example: Net income of ₪20,000 → Maximum monthly payment: ₪8,000
The Three Mortgage Tracks (Maslulim)
Variable rate = Bank of Israel rate + margin. Currently ~5.75%. Flexible - you can pay off early without penalties. Best when rates are falling.
Locked interest rate for entire term. Currently ~4.7%. Certainty but early repayment penalties apply.
Lower rate but your principal grows with inflation (CPI). Risky in high-inflation periods.
Tabu (טאבו) - Land Registry
The official property registry in Israel. Before buying any property, you must obtain a "Nesach Tabu" (title extract) to verify ownership and check for existing liens. This is similar to a title search in the US.
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Open Mortgage CalculatorChapter 2: The Macro Picture - Interest Rates in 2025
Trend Change: Rates Are Falling
After a long period of increases, the Bank of Israel is signaling a trend reversal. Forecasts suggest gradual rate decreases toward 3.5%-3.75% in the coming years.
Implication for borrowers: Prime track is becoming more attractive, but requires smart risk management.
Prime Rate
Current: 5.75%
Forecast: Dropping to 4.25%-4.5%
Best for short-to-medium term savings
Inflation (CPI)
Recent: 3-4% annually
Forecast: Dropping to 2.5%-3%
Still elevated - be cautious with CPI-linked tracks
Chapter 3: Where to Buy Real Estate in Israel 2025
Key Insight
Forget "prices are rising everywhere". The 2025 market is split. Not every area is the same, and not every investment pays off.
Tel Aviv & Central Region
- • Trend: Cooling market, healthy price correction (2-4% decline)
- • Rental Yield: 2.3% average
- • Conclusion: Not attractive for investors currently
Jerusalem & Periphery
- • Trend: Surprising price increases, strong demand (5-10%)
- • Rental Yield: 3.5-4.2%
- • Conclusion: Significant opportunity for investors!
Practical Example: Double Returns
Compared to 2.3% in central Tel Aviv - massive difference
Chapter 4: Common Challenges for Olim & Expats
Challenge 1: No Israeli Credit History
Your excellent credit score from the US, UK, or elsewhere does not transfer to Israel. BDI (Bank Data Israel) starts fresh.
Solution: Banks evaluate Olim differently. They focus on your employment contract, savings, and income stability. A letter from your employer and bank statements are crucial.
Challenge 2: Language Barrier
All mortgage documents are in Hebrew. Bank meetings are often conducted in Hebrew. This creates risk of misunderstanding complex terms.
Solution: Work with a mortgage advisor who speaks English and can translate all documents and negotiations. RealFix provides full English support.
Challenge 3: Foreign Income
If you work remotely for a foreign company or have income from abroad, Israeli banks may be hesitant to approve your mortgage.
Solution: We know which banks accept foreign income and how to present your case. Documentation is key - tax returns, contracts, and bank statements showing consistent deposits.
Chapter 5: How RealFix Helps English Speakers
Bank Said No? RealFix Has Solutions Banks Do Not Offer.
With experience since 2008 and deep knowledge of current regulations, we specialize in complex cases that standard banking rejects. Even if your banker said it is impossible.
Conclusion: Our Experience, Your Peace of Mind
RealFix has been operating since 2008. We survived the subprime crisis, the COVID period, and the turbulence of recent years. We know what works - and what does not.
When you take a mortgage, you do not just need "a rate" - you need a strategy that will hold for 20 years.
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