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There are a number of mortgages available from the banks in Israel. The following is a brief summary of some of the most popular mortgage options. Each mortgage is designed and suitable to a particular client depending on a number of factors, including but not limited to: Currency of income, place of residency, financial goals, economic outlook and economic standing.
§ A foreign currency mortgage is available in a number of the major currencies. The mortgage's interest is the LIBOR rate plus a fixed premium set by the bank. These mortgages are generally available up to 25 years and the repayment is in the currency that was borrowed.
§ A Dollar linked mortgage is a shekel mortgage linked to the dollar rate for a period of up to 30 years. The currency of loan and repayment is in shekels according to the dollar rate. The mortgage's interest is the LIBOR rate plus a fixed premium set by the bank.
§ Dollar link and interest rate protected: This mortgage is identical to the dollar-linked mortgage, except for the fact that the initial interest rate is fixed in the first 9 - 18 months. At the end of that period, the interest rate will be updated according to the LIBOR plus a fixed premium set by the bank.
§ Euro linked mortgage: Similar terms to dollar linked, except linked to the Euro. Most suitable to a person whose primary income is in Euros.
Bridge Loan
A loan extended to borrowers who own an apartment, for purchasing a property in the interim period until their previous apartment is sold. This is a short-term loan for a period of up to two years.
General Terms and Conditions
§ Depending on the bank the LIBOR rate may change every 3,6,9 or 12 months.
§ Most dollar-linked loans have the possibility of early repayment without incurring any major penalty or fee.
§ In some cases it is possible to arrange interest only payments up to a maximum of 2 years depending on the financial strength of the applicant.
Shekel Mortgages
Shekel Linked Mortgage at fixed interest rate
A mortgage at a fixed interest rate linked to the consumer price index for a period of 4 to 30 Years.
A linked mortgage at fixed interest rate
A mortgage at variable interest linked to the consumer price index, which can Be spread over an extended period of up to 32 years - and thus making it Possible to have lower monthly payments
A linked mortgage at prime interest rate
Mortgage linked to the prime interest rate (based on the Bank of Israel's Rate) for a period of up to 25 years
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