Non-Linked Mortgage Based on Makam Yield

Or, in other words: an especially flexible non-linked mortgage in shekels, for a period of up to 30 years.

At a glance:
A non-linked mortgage offered for a maximum period of 30 years. Its interest rate is updated annually, based on the Makam yield (short-term securities / central bank bills) plus a reset margin. This type of mortgage can be repaid via all repayment methods typically used by Bank of Jerusalem.

Who can benefit from this mortgage?

Those seeking a convenient loan with a reducing balance for a period of 30 years. 

Main Advantages

  • Avoids any linkage of the loan principal to the CPI.
  • A long-term non-linked mortgage, where the interest rate is updated on an annual basis.
  • Fixed monthly payments for a period of one year, without any risk of changes occurring during this period, unlike the constantly-fluctuating payments associated with prime-based mortgages.
  • Continual balance reduction (as the monthly payment includes both the principal and interest).
  • Total flexibility: the mortgage can be repaid in part or in full once a year, with no penalty for early repayment, except an NIS 60 handling fee.
  • Option to switch to a different mortgage type at every interest rate update point. The advantage: your decision to take this type of mortgage is never set in stone, giving you complete flexibility and peace of mind. Switching from a non-linked shekel mortgage to another mortgage type can only be done once.

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 or for a balloon schedule for a period of up to 2.5 years.

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. It is possible to pay off the loan early without incurring penalties, provided that you supply notice 10 days in advance, as is customary. The settlement will be no less than 10% of the loan balance and will be paid within 45 days of issuing the notice. If early repayment is made outside the interest rate update points (which occur once a year), an early repayment fee may be involved. In such a case, the fee will be calculated in relation to the date of the next interest rate update, and not in relation to the end date of the mortgage.

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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