Bank of Israel data show that since the start of 2023, the average mortgage taken by investors buying apartments has risen by more than 50%, while the average for buyers of a single home in the open market has risen by only 16%. In May, investors took an average mortgage of 1.46 million shekels, an all-time high, compared with 1.1 million shekels for single-home buyers outside subsidized housing programs.
At the start of 2023, the two groups were borrowing roughly the same amount, about 950,000 shekels each. The shift is linked to Israeli developers’ financial promotions, especially pre-sale deals that let buyers put down only 10% to 20% upfront and postpone most of the payment until occupancy, often four years or more later. According to the State Comptroller’s latest report, these promotions offered buyers an average benefit of 123,000 to 165,000 shekels, or 5% to 7% of the apartment’s price.
The result is that many mortgages are effectively delayed “balloon” loans, with repayment pushed off until much later. But conditions have changed since these deals were signed in the second half of 2023, shortly before the war began. Interest rates moved, some borrowers refinanced, and not all developers now allow resale before occupancy. Meanwhile, demand has fallen sharply.
Bank of Israel data show the pressure is intensifying, especially from the final quarter of 2025, when more projects began reaching completion. The central bank estimates that an average of 640 investors a month are now forced to activate large mortgages. The Mortgage Advisors Association says investors are also buying pricier homes than before, with 68% of their mortgages now for apartments costing more than 3 million shekels, up from about half four years ago, versus 43% among regular homebuyers. Association chair Nofar Yaakov said, “It is very likely that some of this comes from the financial promotions that pushed them to buy expensive apartments and take large mortgages,” adding that some buyers may be betting that prices will keep rising.
