Israel: New Program Expected To Reduce Home Mortgage Costs

Tel Aviv [Israel]: The Accountant General of the Ministry of Finance and Israel's Capital Market Authority issued a new procedure whereby non-banking credit providers will also be entitled to exemption from the restrictive conditions applicable under the "discounted apartment" plans. An exemption which so far only mortgage banks have been eligible to receive.

The ministry called this "an important step aimed at removing barriers to the entry of additional players into the housing credit market."

As part of the terms of the "discounted apartment" plan (cost per resident, reduced price and target price), the property is not allowed to be sold during the period from the date of purchase to 7 years from the date of winning the lottery or 5 years from the date of receipt of Form 4 (earlier than their sons). To date, mortgage banks have been exempted from this restrictive condition in cases where they seek to exercise the property in credit repayment failure, even if the failure event applies at a time when the sale ban is still in place.

The move is expected to facilitate non-banking credit bodies that want to enter the real estate-backed housing market or expand their operations in this area, thereby increasing competition and providing cheaper financing offers to young borrowers.

Accountant General Yehli Rotenberg: "The easing we have published together with the Capital Market Authority will facilitate the entry of non-bank credit providers into the housing loan market and increase competition in this market. This competition is expected to reduce interest rates in the mortgage market and facilitate first-time home buyers.