Israeli Mortgage Uptake Surges on Prime Rate Amid Overall Decline
Translated & summarized from N12 by baba
In September 2026, Israeli mortgage lending fell 20.5% from August to 8.66 billion shekels, but loans on the prime rate track jumped 150% year-over-year. Index-linked mortgages saw their share drop to 9.1% of the total. Despite the monthly decline, overall mortgage lending for 2026 is up 12% compared to last year.
The story in 5 lines · by baba
- Israeli mortgage lending in September 2026 fell 20.5% from August to 8.66 billion shekels.
- Loans taken on the prime rate track surged 150% year-over-year in September 2026.
- Index-linked mortgages represented only 9.1% of new mortgages in September 2026.
- Total mortgage volume for 2026 is up 12% compared to the same period in 2025.
- Borrowers are now prioritizing loan certainty over initial repayment amounts, according to an industry executive.
In September 2026, the total volume of mortgages taken in Israel decreased by 20.5% compared to August, reaching approximately 8.66 billion shekels. This figure also represents a 2.1% drop from September of the previous year. However, a significant shift occurred in the types of mortgages chosen by the public.
The volume of loans taken through the prime rate track, excluding balloon and bullet loans, surged by 150% year-over-year to nearly 2 billion shekels. This contrasts sharply with a decline in index-linked mortgages, which accounted for only 9.1% of new mortgages, down from 14.1% in the same period last year. The majority of mortgages, 90.8%, were taken on non-index-linked tracks.
Loans for balloon and bullet mortgages, often associated with contractor financing, saw a decrease of 21.2% from August and 17.3% from September 2025, totaling 1.114 billion shekels.
Despite the monthly decrease, the total mortgage volume for the first nine months of 2026 rose by 12% compared to the same period in 2025, amounting to 88.26 billion shekels.
Data from August indicated that 48.5% of mortgages were for 60% to 75% of the property value, with the average repayment from income at 29.23%. Eyal Elhiani, CEO of Luzone Credit and Finance, suggested the prime rate increase reflects expectations of interest rate cuts but cautioned about the associated risks, noting that borrowers are now considering certainty over initial repayment amounts.
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