Guide
Israeli mortgages for international buyers
Israeli mortgages work differently from U.S. lending: multi track structures, CPI indexation, and a Prime rate tied to the Bank of Israel’s policy rate. This guide explains how the system works, how it differs from the U.S., and how to model a realistic payment plan. For the full purchase flow, see our Buying guide and FAQ.
Quick snapshot
Regulatory thresholds are set by the Bank of Israel and can change. Confirm your specific terms with the lender.
Israel vs. U.S.: key differences
In the U.S., adjustable rate mortgages (ARMs) use an index + margin formula. In Israel, mortgages are commonly split into tracks: Prime, fixed, and variable, with some tracks indexed to CPI.
Rate resets based on the index plus a fixed margin, with caps that limit changes.
Prime = Bank of Israel policy rate + 1.5 percentage points, updated by the Monetary Committee.
Linked tracks adjust the principal by CPI, so payments can rise with inflation.
Israeli mortgages are typically split into multiple tracks to balance rate and CPI risk.
Mortgage tracks in Israel
Bank of Israel guidance outlines several common tracks: fixed/variable, linked/unlinked, and the Prime track. Each behaves differently under inflation or rate changes.
Fixed payment over the term, no CPI indexation.
Fixed rate but the principal is CPI linked, so payments may rise with inflation.
Unlinked principal with a rate tied to Prime.
Rate resets at defined intervals (often tied to government bond yields), with or without CPI linkage.
Key regulatory limits in Israel
The Bank of Israel limits both loan to value (LTV) and payment to income (PTI) to keep leverage within reasonable bounds.
Up to 75% of property value.
Up to 70% of property value.
Up to 50% of property value.
Above 40% is considered high risk.
A balanced mix helps manage inflation and rate volatility risk.
How to build a smart mix
- Balance fixed vs. variable and linked vs. unlinked tracks.
- Stress test your monthly payment under higher rates or CPI.
- Preserve flexibility with variable tracks for early repayment.
- Compare bank offers using the same mix.
Our mortgage consultants tailor the mix to your profile, goals, and property type.
Mortgage calculator (multi track)
Enter the property price, down payment, and track mix to estimate monthly payments. Add tracks and set CPI assumptions to model indexed components.
This calculator provides estimates only. Actual payments depend on bank terms, CPI changes, and rate adjustments.