Mortgage interest rates are still at an all-time low, despite Bank of Israel efforts to boost them. The average interest rate on Consumer Price Index (CPI) linked mortgages rose to 2.2% in early December from 2.18% in November.
The lowest interest rate is for 5-12 year mortgages, at 2.02%, while the interest rate for 20-year mortgages is 3.16-3.21%.
The ministerial legislation committee will today discuss a proposal by Minister of Housing and Construction Ariel Atias to subsidize mortgages for young couples seeking to buy apartments in the periphery to the tune of NIS 800 a month, and to reduce the mortgage interest rate on persons eligible for Ministry of Housing benefits.
The Ministry of Finance has been opposing Atias' proposal for as long as he has been pushing it. The Ministry of Finance's official objection is that the proposal will boost housing demand in the periphery, where prices have been soaring in recent months. Increasing demand will hurt precisely the people that Atias claims he want to help. The official reason is that the proposed mortgage subsidy will cost more than NIS 1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2010
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