Israel Residents Only
"Mechir Lamishtaken" (Price for Resident) is an Israeli government program for eligible first-time homebuyers who are Israeli residents. This article explains the financing advantages for program participants. Contact us to check your eligibility.
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What is the "Mechir Lamishtaken" Loophole?
The Biggest Financial Secret
When buying through the "Mechir Lamishtaken" program, there's a huge gap between the discounted purchase price and actual market value. The bank calculates the mortgage based on the higher market value - not the contract price!
Practical Example: 4-Room Apartment in Petah Tikva
Instead of $90,000 (25% of purchase price) - savings of $65,000 in equity!
Why Does This Happen?
Bank of Israel regulation requires financing of up to 75% of "property value" - not purchase price. When the value is higher than what you paid (thanks to Mechir Lamishtaken), you get "free leverage".
The Math: How to Achieve 90% Effective Financing
The Magic Formula
Step 1: Appraiser Sets Value
The bank sends a certified appraiser who values the apartment based on market value (not what's written in the contract). In Mechir Lamishtaken, the value is always higher than the price.
Step 2: Bank Calculates 75% of Value
Maximum mortgage = 75% × market value (not purchase price!)
Example: $440,000 × 75% = $330,000 mortgage
Step 3: Calculate Real Equity Required
Purchase price ($355K) - Mortgage ($330K) = $25K equity
That's only 7% of purchase price! (or 5.7% of market value)
Without the Loophole (Regular Purchase)
- • Apartment: $440,000
- • Mortgage 75%: $330,000
- • Equity required: $110,000
- Need to save 25% of price
With the Loophole (Mechir Lamishtaken)
- • Apartment: $355,000 (discounted!)
- • Mortgage 75%: $330,000
- • Equity required: $25,000
- Savings: $85,000!
Parents Can Help!
Even if you don't have equity, parents can use their property to help you. Read about how parents help children buy their first home.
The Problem: Why Banks Don't Like This
The Complication: The Appraisal Must "Pass"
The bank doesn't have to accept the high appraisal. If their appraiser decides "the apartment isn't worth $440K" - they'll only give a mortgage based on the lower value.
What Does the Bank Check?
- • Market prices: Similar apartments in the area (comparables)
- • Property condition: Does it need renovation? That lowers value
- • Gap too large: If the difference between Mechir Lamishtaken and market is over 20% - suspicion
What Happens if Appraisal is Rejected?
Say the appraiser says "the apartment is only worth $400K" (not $440K). Then:
- • Mortgage: $400K × 75% = $300,000
- • Equity required: $355K - $300K = $55,000
- • Instead of $25K - suddenly need double!
The RealFix Solution: Professional Appraisal Support
Most banks don't like approving high appraisals on Mechir Lamishtaken. They have a "blacklist" of problematic projects, and they know how to reject applications. We know how to get through.
Our data: In 87% of Mechir Lamishtaken cases we handled in 2024, we achieved appraisals of 95%+ of expected market value. This translates to 15-25% lower equity than clients expected.
Additional Tips for Maximum Leverage
Tip #1: Appraisal Timing
Request appraisal when the market is strong. Appraisers work based on "market prices in the last quarter." If the market is rising - the appraisal will be higher.
Tip #2: Prepare in Advance
Before signing a contract, check similar apartment prices in the area. If the gap is too large (30%+) - the project may be problematic and won't be approved.
Tip #3: Prepare an "Evidence File"
Collect in advance: Recent sales in the area, future planning (light rail, parks), new projects that increase value. RealFix will help you prepare this.
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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.
