At a glance
mortgage loan in a foreign currency, for a period of up to 20 years. The mortgage is based on the benchmark interest rate with a fixed spread, and payments are made quarterly (every three months). Foreign currency loans are available in the following currencies: USD, GBP, EUR, CHF, CAD.
Who can benefit from this mortgage?
Foreign residents who receive their income in a non-shekel currency and are interested in purchasing an apartment in Israel.
Main Advantages
The most significant advantage of this type of mortgage is that it can be paid off early without incurring a penalty (other than an NIS 60 handling fee), when providing notice at least 10 days in advance, up to 45 days from the date such notice is received.
Interest Rate Benchmarks for Foreign Currency Mortgages
- SOFR – Secured Overnight Financing Rate: SOFR is based on overnight (O/N) repo market transactions, in which US government bonds serve as collateral. In the event that this rate ceases to exist at any time, the Bank will identify an alternative interest rate, which will replace the above interest rate as a benchmark rate. The Bank will announce the replacement interest rate as soon as it is determined and, in any case, prior to the replacement taking effect.
- The benchmark interest rate is the 5-Year Treasury Rate, based on US government bonds. The benchmark rate quote will be obtained from the Bloomberg trading platform. If the Bloomberg trading platform halts publication of this interest rate, either temporarily or permanently, the Bank will find an alternative source for the interest rate quote. In the event that this rate ceases to exist at any time, the Bank will identify an alternative interest rate, which will replace the above interest rate as a benchmark rate. The Bank will announce the replacement interest rate as soon as it is determined and, in any case, prior to the replacement taking effect.
- Euribor: The Euro Interbank Offered Rate, based on the interbank lending market in Europe. The interest rate reflects transactions / quotes from several banks. The interest rate for the different periods is based on an interest rate forward curve. The benchmark rate quote will be obtained from EMMI (European Money Markets Institute). If EMMI halts publication of this interest rate, either temporarily or permanently, the Bank will find an alternative source for the interest rate quote. In the event that this rate ceases to exist at any time, the Bank will identify an alternative interest rate, which will replace the above interest rate as a benchmark rate. The Bank will announce the replacement interest rate as soon as it is determined and, in any case, prior to the replacement taking effect.
- SONIA – Sterling Overnight Index Average: SONIA is an O/N interest rate based on the OIS (Overnight Index Swap) transaction market in British pounds sterling. The interest rate for the different periods is based on an interest rate forward curve. The benchmark rate quote will be obtained from ICE. If ICE halts publication of this interest rate, either temporarily or permanently, the Bank will find an alternative source for the interest rate quote. In the event that this rate ceases to exist at any time, the Bank will identify an alternative interest rate, which will replace the above interest rate as a benchmark rate. The Bank will announce the replacement interest rate as soon as it is determined and, in any case, prior to the replacement taking effect.
- TONA – Tokyo Overnight Average Rate: TONA is an O/N interest rate based on the OIS (Overnight Index Swap) transaction market in Japanese yen. The interest rate for the different periods is based on an interest rate forward curve, the TORF (Tokyo Tern Risk Free Rate) curve. The benchmark rate quote will be obtained from QUICK Corp. If QUICK Corp. halts publication of this interest rate, either temporarily or permanently, the Bank will find an alternative source for the interest rate quote. In the event that this rate ceases to exist at any time, the Bank will identify an alternative interest rate, which will replace the above interest rate as a benchmark rate. The Bank will announce the replacement interest rate as soon as it is determined and, in any case, prior to the replacement taking effect.
Payment Method
The mortgage can be repaid early without incurring fees, other than an NIS 60 handling fee. This type of mortgage can be repaid in accordance with the Spitzer, Grace, or Balloon schedule.
Payment Arrangements
For foreign currency mortgages, repayments are made once per quarter on the first day of the quarter.
Important: All foreign currency mortgages are for a period of 4-30 years.
