High home prices and the bank's tightening of mortgage terms begin to have an effect on the market.
NIS 3.94 billion in new mortgages were granted in August 2011, 3.6% less than in July, and 18% less than the peak of NIS 4.8 billion in May, the Bank of Israel reported today, as high home prices and the bank's tightening of mortgage terms begin to have an effect on the market.
The proportion of variable interest mortgages fell as the public switched to fixed-interest mortgages: variable-interest mortgages fell 7% to NIS 3 billion in August, compared with July while fixed-interest mortgages rose 9% to NIS 917 million.
Fixed-interest mortgages rose 55% in June-August, while variable-interest mortgages fell 28%, after the Bank of Israel sharply restricted variable-interest mortgages to one third of a total loan. Despite the drop, variable-interest mortgages accounted for 76.7% of total mortgages in August.
Published by Globes [online], Israel business news - www.globes-online.com - on September 14, 2011
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