Mortgage Volume Surges 14% to Reach 2021 Peak Levels
Translated & summarized from Ice by baba
Israel's mortgage market volume jumped 14% year-over-year in October, reaching 9.284 billion shekels, driven by mortgage refinancing due to falling interest rates. This surge brings the market close to 2021-2022 peak levels. Borrowers are increasingly opting for prime rate loans over index-linked ones, anticipating future rate cuts. The Association of Mortgage Consultants urges caution and careful financial planning.
The story in 5 lines · by baba
- Mortgage volume in Israel rose 14% year-over-year to 9.284 billion shekels in October.
- The surge is attributed to borrowers refinancing mortgages amid falling interest rates.
- Year-to-date housing loan volume reached 97.5 billion shekels, nearing 2021-2022 peaks.
- Borrowers are shifting towards prime rate loans and away from index-linked options.
- The Association of Mortgage Consultants advises caution and careful financial planning.
Israel's mortgage market experienced a significant surge in October, with the total volume reaching 9.284 billion shekels, or 9.76 billion shekels including general-purpose loans. This represents a 7% increase from the previous month. Year-to-date, the volume for housing loans has surpassed 97.5 billion shekels (103.1 billion shekels with general loans), marking a substantial 14% jump compared to the same period last year, and nearing the peak levels seen in 2021-2022.
The primary driver for this increase is attributed to mortgage refinancing, as borrowers sought to capitalize on falling interest rates. This trend was also evident in August, which saw 10.899 billion shekels in new mortgages, a notable rise from 9.118 billion shekels in August 2025. Despite previous interest rate fluctuations, including five reductions since then, the overall volume remains high.
Analysis of borrower behavior reveals shifts in loan preferences. The proportion of loans taken under the prime rate option increased from 26% to 28%, while the non-indexed variable rate saw a decrease. Indexed loans accounted for only 8%, a historically low figure. The weighted nominal interest rate rose slightly to 4.42% from 4.35%.
The Association of Mortgage Consultants noted that the strong performance of the mortgage market is somewhat detached from the lower volume of physical property transactions. They explained that high financing levels are largely due to the finalization of past deals and financing arrangements. Borrowers are increasingly favoring prime rate loans over index-linked ones, anticipating future monetary easing despite current rate increases.
The association advised the public to remain vigilant, carefully assess repayment capacity, and tailor mortgage compositions to their actual needs, especially given the challenging interest rate environment and record credit market activity.