Non-Linked Prime-Based Mortgage

Or, in other words: a variable-interest shekel loan for a period of up to 30 years.

At a glance:
A non-linked mortgage in shekels for a period of up to 30 years, with variable interest based on the prime rate, plus a reset margin. Payment is made monthly in accordance with a predetermined amount, subject to changes in the interest rate.

Who can benefit from this mortgage?

  • Those who would prefer to avoid linking the principal to the CPI.
  • People who can absorb significant fluctuations in monthly payments, in the event that the Bank of Israel raises the interest rate.

Main Advantages

  • The mortgage can be repaid without incurring an early repayment fee (other than an NIS 60 handling fee) when 10 days’ advance notice is provided, up to 45 days from the date of the notice. If advance notice is not provided as mentioned, an advance notice fee will be charged at the rate of 0.1% of the amount paid.
  • The non-linked principal is repaid on a monthly basis, in accordance with a predetermined amount.
  • The balance of the loan principal continually decreases (as the monthly payments go toward both the principal and the interest).
  • Monthly payments increase or decrease based on changes to the Bank of Israel's prime rate.

Payment Method
This type of mortgage can be repaid in accordance with the Spitzer, Grace, or Balloon schedule.  You can opt for a 7-year grace period in which you make partial payments (interest only), at the end of which, the principal will be repaid under a Spitzer table.

Payment Arrangements
The mortgage is repaid through an account debit authorization. The repayments are made once a month, on either the 1st or 15th of the month, whichever you prefer.

Provision of credit is at the sole discretion of the bank. Failure to comply with loan repayment may result in interest on arrears and repossession proceedings.

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