Israeli Mortgage Amounts Surge, Banks Benefit as Borrowers Take Larger Loans

Data from the Bank of Israel reveals a significant increase in the average mortgage amount taken by Israelis, particularly in the period between March and July of 2025 and 2026. While the total volume of mortgage disbursements for home purchases rose by 10%, this growth is primarily driven by a 7% increase in the average loan size, with the number of new loans growing by only 3%.

Further analysis by the Association of Mortgage Consultants indicates that when all types of loans are considered, the overall increase in mortgage volume stands at 9%, entirely attributable to larger average loan amounts, as the number of loans taken remained unchanged. This trend is partly influenced by falling interest rates, which have led to a preference for prime-rate mortgages over variable-rate loans.

The average loan amount for purchasing a home climbed from approximately 1.12 million shekels to 1.23 million shekels. For alternative housing, the average loan reached 1.42 million shekels, up from 1.29 million. Notably, real estate investors saw the average loan amount for their purchases jump by 17%, from 1.17 million to 1.37 million shekels, even as the number of loans taken by investors decreased by 21%. This resulted in an overall 8% drop in total disbursements for investors.

The increase in average loan amounts was most pronounced for second-hand properties and self-build projects, rising from 1.14 million to 1.26 million shekels. Purchases from contractors saw a more modest increase, from 1.09 million to 1.18 million shekels. In essence, while the mortgage market maintains high activity levels, the financial burden on individual borrowers is deepening.