Over 30% Jump in Israelis Taking High-Financing Mortgages

The volume of mortgages issued in June broke a nearly two-year record, reaching 11.056 billion shekels across 10,067 new loans. This represents a sharp increase from May, when mortgage volume stood at approximately 9.68 billion shekels, and an impressive jump of about 24% compared to June of last year, when the volume was 8.91 billion shekels.

Beyond the headline figures indicating a market resurgence, an analysis of Bank of Israel data reveals the distribution of financing rates and the level of risk borrowers are assuming compared to previous months and the situation a year ago.

The credit map for June shows that the high-financing segment—loans covering over 60% and up to 75% of property value—continues to lead by a significant margin. In this group, which primarily consists of young couples and first-time homebuyers, mortgage volume crossed the 5 billion shekel threshold, reaching 5.177 billion shekels, or about 46.8% of the total housing loans for the month. In simple terms, nearly half of all mortgage takers are opting for high-financing loans.

This marks a dramatic jump of about 31.3% in monetary volume compared to June 2025, when this segment stood at 3.942 billion shekels. Meanwhile, the medium-high financing bracket (over 45% to 60%) recorded 3.221 billion shekels, accounting for approximately 29.1% of the market. Consequently, over three-quarters of the market is taking out mortgages ranging from nearly half to 75% of the property value.

An examination of the low-medium financing segment (30% to 45% of property value), typically associated with those upgrading their housing with high equity, shows a volume of 1.645 billion shekels, representing about 14.9% of the total market. In May, this figure stood at 15.5%. While there is an increase in absolute numbers compared to June of last year, the share of total borrowers in this bracket decreased from 16.6% to 14.9%, indicating that while more people are buying homes with high equity, the market growth is driven by a larger overall number of borrowers.

Another indicator of risk is the mortgage repayment-to-income ratio. Data shows that a substantial portion of homebuyers are stretching their financial capacity to the limit. In June, the volume of mortgages with monthly repayments between 30% and 40% of salary reached a peak of 5.096 billion shekels—the highest figure recorded this year and the largest share of total credit. As previously reported, this accounts for nearly half of all mortgage takers.

This is a significant increase from May (4.57 billion shekels) and a jump of about 21.8% compared to June of last year. Essentially, more than half of the credit granted in June involves borrowers who allocate between one-third and nearly half of their disposable income to mortgage repayments to cope with rising apartment prices and the high-interest-rate environment.

Looking at the safer repayment bracket of 20% to 30% of income, June recorded 2.892 billion shekels, a significant 23% increase compared to June of last year.