Israeli Average Mortgage Payment Drops Annually, Tel Aviv Leads Costs

The average monthly payment for a new mortgage in Israel has decreased by 4.8% over the past year, reaching 10,864 shekels, according to a study by the Alrov Institute. This figure represents a 552 shekel reduction from the previous year. The study analyzed mortgage payments for a typical 25-year loan on a four-room apartment, assuming a 70% financing rate across 12 major Israeli cities.

While the quarterly average payment remained largely stable, with a difference of only 9 shekels, the annual decline was significant. The decrease in average payments was observed across all 12 studied cities compared to the same quarter last year. However, the study cautions that this trend doesn't necessarily indicate falling housing prices, but could be influenced by a shift in the types of properties being purchased, such as more affordable homes in smaller cities and fewer in expensive ones like Tel Aviv.

Geographically, mortgage costs vary significantly. In cities like Be'er Sheva, the monthly payment is as low as 5,106 shekels, while in Haifa it's 6,519 shekels. Larger cities like Ashdod, Hadera, Bat Yam, Petah Tikva, Rishon LeZion, Rehovot, and Bnei Brak have payments ranging from 8,542 to 10,092 shekels.

The highest mortgage payments are found in the major metropolitan areas. Ramat Gan averages 11,638 shekels per month, Jerusalem averages 12,185 shekels, and Tel Aviv stands out with the highest average payment at approximately 16,850 shekels per month for a four-room apartment.

Looking at year-over-year changes, Ramat Gan saw a 12.2% decrease in mortgage payments, Bnei Brak 9.1%, Bat Yam 7.9%, and Tel Aviv 7.4%. Jerusalem experienced the smallest annual decrease at just 0.2%.

The housing affordability index, which assesses households' ability to purchase a four-room apartment, uses data from the Israel Tax Authority, the Central Bureau of Statistics, and the Bank of Israel.