Monday, June 20, 2011
Despite BOI directives, new mortgages soar
The Bank of Israel directive came into effect on May 5, but it will reportedly take several months until the new criterion applies to all mortgages. In addition, in the days before the directive came into effect, real estate sources said that there was a rush to secure mortgages by homebuyers seeking variable interest mortgages. The Bank of Israel also reports that variable interest mortgages continued to dominate the market in May. New variable interest mortgages accounted for NIS 4.17 billion of the total of NIS 4.81 billion in new mortgages granted during the month - 86.6%.
The average mortgage interest rate on Consumer Price Index (CPI) linked mortgages rose for the fourth consecutive month to 2.63% in May from 2.48% in April. The average mortgage interest rate on CPI-linked mortgages reached a low of 2.13% in September 2010. The average mortgage interest rate on unlinked mortgages rose to 4.22% in May from 3.97% in April.