Israeli Household Debt Surges on Consumer Loans

Israeli households significantly increased their debt load in the second quarter of 2026, with consumer loans, not mortgages, being the primary driver of this growth. Non-mortgage debt rose by approximately 9 billion shekels in just three months, reaching about 260 billion shekels, according to data from the Bank of Israel reported by Israel Hayom. This represents a 3.6% increase in non-mortgage debt for the April-June period, a sharp reversal from the near stagnation seen earlier in the year. At the end of 2025, this debt stood around 250-251 billion shekels, with a modest 1.6% increase in the fourth quarter and a slight decrease of 0.1% in the first quarter of 2026.

The acceleration in non-mortgage borrowing is also evident when comparing year-over-year figures. By the end of June, annual growth rates for non-mortgage lending approached 10%, up from 5.7% at the end of the first quarter and about 6% at the end of 2025. This surge has caused consumer debt to grow faster than mortgage debt, which saw annual increases of around 7%.

Banks remain the largest lenders to Israeli households, holding approximately 181 billion shekels of the non-mortgage debt by the end of June, an increase of about 4 billion shekels from March. However, Israelis also borrowed more from other sources. Debt to credit card companies rose from about 45 billion shekels in March to 48 billion in June, a 3 billion shekel increase. Additionally, debt to institutional organizations, including pension and provident funds, grew to around 28 billion shekels from 26 billion in March and 25 billion at the end of 2025.

Overall household debt in Israel reached approximately 935 billion shekels by the end of June, with a quarterly increase of about 22 billion shekels. While mortgage debt still constitutes the largest portion at around 675 billion shekels, the non-mortgage portion grew at a significantly faster rate of 3.6% compared to the 1.9% growth in mortgage debt during the second quarter.