The Bank of Israel may announce new mortgage tightening measures at the end of the month, depending on the change in the November Consumer Price Index (CPI), which the Central Bureau of Statistics will publish on December 15, and mortgage data, which will be published later this month, said sources at the central bank.
The possible regulations include capping mortgages at 50% of the financing and banning variable interest rate mortgages, based on the prime rate, altogether.
A few months ago, "Globes" revealed a Bank of Israel contingency plan to cool the mortgage market, including a total ban on prime rate mortgages. The Bank of Israel called these measures "doomsday weapons" that it would not quickly use.
Governor of the Bank of Israel Prof. Stanley Fischer has repeatedly said that he will not hesitate to impose further restrictions on the mortgage market. In late October, together with the interest rate decision for November, the Bank of Israel tightened requirements for banks on mortgages of NIS 800,000 and higher, where the prime rate component is 25% of the mortgage loan.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2010
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