Mortgage interest rates in Israel shot up in February. The average rate on index-linked mortgages rose to 2.85%, which compares with 2.66% in January and 2.58% in December, according to Bank of Israel figures. Since June 2015, when the rate was 2%, there has been an almost constant rise.
The rise in mortgage rates is across all loan periods. On 10-15 year loans, the rate rose to 2.73% in February from 2.66% in January.
On 15-20 year loans, the rise was from 2.93% to 3.18%. For 20-25 year loans the rate rose from 3.05% to 3.15%, and for loans for more than twenty years the rise was from 3.09% to 3.22%.
On a longer time perspective, mortgage rates are still low. Rates are coordinated with Bank of Israel interest rates, and the central bank's rate is at a historical low, with analysts estimating that there is no trigger for a rise on the horizon.
The average interest rate on unlinked shekel mortgages rose to 2.6% in February, from 2.54% in January. The average rate takes account of both variable-rate and fixed-rate mortgages.
At present, variable-rate mortgages offer the lowest rates. Variable rates are based on the prime interest rate, which in turn is calculated as the Bank of Israel rate plus 1.5%. The bank's rate is currently 0.1%, giving a prime rate of 1.6%.
Published by Globes [online], Israel business news - www.globes-online.com - on February 11, 2016
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