The amount of highly-leveraged mortgages, those with a loan-to-value (LTV) ratio of 60-75%, totaled NIS 2.07 billion in May 2013, 53% more than in April, the Bank of Israel reported today. High LTV mortgages accounted for 36.6% of all mortgages in May, up from 35.3% in April.
Mortgages with an LTV of 45-60% totaled NIS 2 billion in May, up 45% from April. Mortgages with an LTV of 75-90% jumped 88%, although the total was a negligible NIS 79 million in May.
New mortgages totaled NIS 5.6 billion in May, 47% more than in April. The May total includes NIS 573 million in refinancing. The low interest rate, combined with the VAT hike, which came into effect on June 2, and other pending austerity measures prompted many Israelis to get off the fence and buy homes in May. 8,880 new mortgages were granted in May, 39% more than in April, and the average mortgage rose to NIS 635,000 in May from NIS 631,000 in April.
In May, 1,573 new mortgages, totaling NIS 861 million, were granted to buy an apartment for investment, up from 987 mortgages totaling NIS 588 million in April - an increase of 46%.
The amount of mortgages granted with an LTV of 45-75% in May was the highest since August 2012. NIS 2.16 billion in new mortgages with an LTV of over 60% were granted in May, 38.3% of all mortgages, up from 36.8% in April.
37.5% new borrowers will use at least 30% of their monthly income to make mortgage payments, down from 39% of such borrowers in April. 19% of borrowers will spend up to 20% of their monthly income on mortgage payments, and 35% will spend 20-30%.
Outstanding mortgages rose to NIS 232.6 billion in May from NIS 229.2 billion in April, and NIS 210.7 billion in May 2012.
Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013