The 2025 Situation: Rates Down, Inflation Up
Current Prime Rate: 5.75% (down from 6.5% at start of 2024). Bank of Israel forecast: decrease to 4.25% in 2026.
Inflation: 3-4% annually - above the 1-3% target. Meaning: prices are rising faster than rates are falling.
Interest ⬇️
5.75% → 4.25% (forecast)
Inflation ⬆️
3-4% annually
Solution = Mix
Protection in all scenarios
3 Track Types: What Are the Differences?
Prime Rate
Variable rate that follows the Bank of Israel base rate. Current: 5.75%.
✅ Advantages:
- • Cheap during rate decreases
- • Maximum flexibility
- • No early repayment fee
❌ Disadvantages:
- • Can rise suddenly
- • Uncertainty
- • Hard to budget
Fixed Rate
Locked rate for the entire track period (5-30 years). Current 20-year: 5.2%.
✅ Advantages:
- • Full predictability
- • Peace of mind
- • Fixed budget
❌ Disadvantages:
- • More expensive than Prime
- • High early repayment fee
- • Miss out on rate drops
CPI-Linked (Madad)
Fixed rate + inflation adjustment. Current: 3.8% + Consumer Price Index (CPI).
✅ Advantages:
- • Inflation protection
- • Matches salary growth
- • Low base rate
❌ Disadvantages:
- • Principal increases
- • Complex to understand
- • Payment surprises
Recommended Mix for 2025: 70/20/10
The Optimal Formula
Why does this work? You benefit from Prime rate drops (70%), but you're also protected from sudden increases (20% fixed) and from inflation (10% CPI).
Mix Examples by Life Stage
👨👩👧 Young Family (25-40)
Rationale: Long time horizon, income growth expected, can handle volatility.
👔 Mid-Career (40-55)
Rationale: Peak earning years, need stability, moderate risk tolerance.
🏖️ Pre-Retirement (55+)
Rationale: Income stability critical, no time to recover from mistakes, prioritize predictability.
Frequently Asked Questions
Frequently Asked Questions
A mortgage mix (Tamhil in Hebrew) is the allocation of your loan across different tracks - Prime, Fixed, and CPI-Linked. Each track responds differently to economic changes (interest rates, inflation). A well-designed mix protects you: if interest rates rise, your fixed portion saves you. If inflation rises, your CPI portion protects you. If both drop, your Prime portion is cheap. It's financial insurance for your home loan.
Get Your Personalized Mortgage Mix Analysis
Every situation is unique. Let our mortgage strategists analyze your profile and build the optimal mix for your circumstances.
Legal Disclaimer
The information and simulations presented on this website are for illustrative purposes only and do not constitute a binding offer for credit or financial advice. Credit Approval: Subject to final underwriting, clean credit data (positive credit score), clean banking history, and meeting the threshold requirements of the financing institutions. Interest Rates: The interest rates displayed are estimates only, based on average market data, and may change at any time according to the client's individual risk profile and economic conditions (Bank of Israel interest rate changes / CPI). No Commitment: RealFix does not guarantee loan approval or the terms displayed in the calculator. E&OE.