Mizrahi Bank has decided to go into direct competition with Bank Tefahot, which it owns, by entering the mortgage field. This emerges from an announcement the bank released today, concerning its new "Super Flexible Loan" product.
A detailed scrutiny of the announcement shows that it refers, to all intents and purposes, to a mortgage loan: a loan for a term of up to twenty years at variable interest. Other commercial banks do not offer loans for such terms. Bank Tefahot is Israel's largest mortgage bank, controlling about one third of the market.
Mizrahi bank reported that the loan amount would be unlimited. The bank confirms that the loan may be taken for any purpose, including the purchase of an apartment. Borrowers usually do not take 20-year credit unless they are purchasing an apartment. For that reason, most commercial banks do not offer loans for such terms.
The loan will bear variable interest and be index-linked for a period of four to twenty years. Interest may vary every few years at certain way stations to be chosen by the customer on receiving the loan. The customer may also, at any station, modify the frequency of the change of interest rate or have the interest rate fixed from that time until the end of the loan term.
Published by Israel's Business Arena October 19, 1999