The negative trend in mortgage takers' leverage is continuing: the average level of monthly mortgage payments fell in January to 33% of monthly salaries, compared with 34.2% in December 2011, and 35.2% in November, the Bank of Israel reported today. The data also indicate a decrease in the average mortgage that homeowners (including investors) took as well as a sharp fall in mortgages for which homeowners are more than three months late with payments.
In January, mortgages totaling NIS 3 billion were taken out, a 5.5% fall from December 2011. Most of the mortgages (NIS 2 billion) were given at financing levels of 45-75% of the apartment's value.
The average mortgage was NIS 538,000, a 4.6% decrease from NIS 564,000 in December. Real estate investors also took smaller mortgages: the average mortgage among investors was NIS 526,000, a 2.5% fall from December. Investors took out mortgages totaling NIS 430 million in January, representing a 9% rise over December.
The lion's share of the mortgages that were granted in January (NIS 952 million) were taken at rates of 20-30% of monthly salaries, whereas NIS 714 million were granted at average rates of 30-40% of monthly salaries. Mortgages totaling NIS 48 million were granted at rates of 80% and higher of monthly salaries, a 21% fall compared with December.
At the end of January, the total value of mortgages that had not yet been defrayed was NIS 204.7 billion, representing a rise of NIS 600 million compared with December. There was a sharp decline in the number mortgages more than three months in arrears: NIS 2.57 billion in January, 5% less than in December.
Published by Globes [online], Israel business news - www.globes-online.com - on March 5, 2012
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