Mortgage taking rose strongly in July

New apartments Photo: Shlomi Yosef

The increase is largely attributable to the Buyer Fixed Price Plan.

July was a strong month in the mortgage taking market. The Bank of Israel published figures today showing the new mortgages taken in July totaled NIS 5.8 billion, similar to preliminary estimates published in "Globes" a month ago and 26% more than the NIS 4.6 billion average monthly volume of new mortgages over the past year.

The summer is usually a strong season for mortgages. Many people prefer to close deals before the school year starts, and August is therefore expected to be another strong month for mortgages. At the same time, the total for July is also 15% more than the NIS 5.1 billion in new mortgages taken in July 2017.

One key factor driving the mortgage market boom is the Buyer Fixed Price Plan. The banks said that the strong increase in mortgages was due to deals in the framework of the plan. The mortgages taken in recent months were attributable to winners of the first lottery in late 2016 and early 2017 who used their own money in the first stage. Only now, after the contractor has gotten things organized, has the mortgage-taking stage been reached. It is believed that apartment buyers under the Buyer Fixed Price Plan currently account for 10% of the mortgage market, but their proportion will increase substantially over the coming year.

Despite the rise in demand, the average mortgage interest remained stable, except for the index-linked instrument with fixed interest, in which the average interest rate in July was 3.2%, compared with 3.28% in the preceding month.

New apartments Photo: Shlomi Yosef
New apartments Photo: Shlomi Yosef
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