Buyers Guide : Mortgages in Israel

Government mortgage for Olim

A government mortgage provides Olim who are not homeowners with a limited, low cost mortgage towards the cost of a property.

Who is eligible ?

The person or family must be: (a) Non-homeowners - "A person who isn't and hasn't been registered as owner or part owner of a property" (b) Aged over 21. Temporary Residents and Tourists are not eligible for assistance.

For the purposes of a Government mortgage, the period of eligibility for an Oleh who made Aliyah between September 1st 1989 and December 31st 1996 is for up to 15 years, but not later than January 1st 2007 or who made Aliyah after January 1st 1997; for 10 years.
A person who is no longer considered an Oleh for the purposes of receiving a Government mortgage remains eligible for assistance. The level of assistance will be calculated in the same way as for an Israeli.

In all cases, additional sums are available for the period of time served in the army and for purchasing properties in certain areas. There may also be additional sums available depending on the length of time that the Oleh has been in the country.

Calculating the mortgage

For Olim and eligible Israelis, the entitlement is calculated on the basis of age, number of siblings, number of children, years of marriage and army service. The eligible person (or couple) receives points for each of these factors, the total sum being calculated as a result of these points.

An Oleh mortgage is calculated on the basis of time in the country and in the event of a couple, the number of children they have. There is however a minimum number of points that in most cases outweighs those that are given as a result of these other factors.

In order to check out precisely how much you are eligible to receive as a Government mortgage, you should pay a visit to a mortgage bank where an adviser would give exact and correct information of repayment schedules and rates of interest.

Additional mortgages must be taken from the same bank as the Government mortgage. Bank mortgage rates can vary quite widely and it is recommended to consult with several banks in order to compare rates before completing the process.

Amounts and information quoted are subject to change.

Israeli residents can now receive loans in dollars for housing from Tefahot Mortgage Bank Ltd, following approval by the Bank of Israel. The dollar loans are intended mainly for buyers of apartments whose main source of income is in foreign currency, including those who receive rents, pensions or salaries from overseas. The dollar loans are granted for a period of 10 years, at an annual interest rate of the LIBOR plus 3.5 percent. Until the recent decision, Tefahot granted dollar loans for housing only to foreign residents living in Israel, or to foreign residents buying investment property in Israel - principally luxury apartments and houses in established neighborhoods.