Israel Mortgage Volume Hits 10.9 Billion Shekels in August, Marking 2026 Record
August 2026 mortgage volumes in Israel reached 10.9 billion shekels, pushing the yearly total to 79.6 billion shekels. Data reveals shifts toward the prime track and fixed unindexed rates.
In August, 10.9 billion shekels were taken out in housing mortgages, bringing the cumulative mortgage volume since the beginning of the year to 79.6 billion shekels—a 13.8% increase compared to the same period last year.
These figures reinforce 2026's status as a record-breaking year for mortgage volumes, according to the Bank of Israel's monthly mortgage report published this week.
Simultaneously, the share of bridge loans out of total housing loans decreased from 13.9% to 13.0%, while the share of loans for any purpose out of total executions remained unchanged at 4.7%.
Alongside high mortgage volumes, the data also point to changes in the loan mix: which tracks borrowers shifted to, what happened to the average interest rate, and which track they continue to move away from?
What Happened to Interest Rates?
The weighted interest rate in August rose from 4.34% to 4.38%. The Mortgage Advisors Association explains that this interest rate is still considered relatively low, following a cumulative drop of 0.18 percentage points since January.
Mortgage advisor Jonathan Berliner says that, surprisingly, the average unindexed interest rate did not rise much in his estimation. According to him, mortgage data arrive with a lag, meaning the rise in bond yields and bank interest rate offers has not yet been fully reflected in the numbers. He notes that specifically in the CPI-linked interest rate, over a 10-15 year term, a jump of more than half a percent was recorded.
Which Track Did Borrowers Increase Exposure To?
Bank of Israel data also show that the loan composition reflects changes in the mix and interest rates. There was a further increase in the weight of the prime track, which climbed from 22% to 24%, following the Bank of Israel's interest rate cuts, at the expense of a decrease in the variable unindexed track weight.
The rise in the prime track's share may indicate that some borrowers see this track as an opportunity to benefit from further interest rate cuts if they arrive later, even if it is a track where repayments may fluctuate over the life of the mortgage.
Mortgage advisor Meir Vider explains that "while in the past the prime track took up the maximum permitted limit (up to a third of the portfolio), today the share of variable interest in new executions has dropped to around 20%-25% only."
He further notes a clear preference for fixed rates: "The public is willing to pay a 'security premium' for a fixed, unindexed interest rate (Kalatz) to lock in the monthly repayment and avoid exposure to further surges in inflation and interest rates."
Which Track Do Borrowers Continue to Move Away From?
Berliner points out another change in the mortgage mix: in August, for the first time, the proportion of mortgages in CPI-linked tracks dropped below 10%. According to him, this is a low rate that has persisted for some time, but the additional decline is interesting and indicates, in his estimation, financial alertness on the part of borrowers.
"Linked to the index is taken only by those who must," he says. "When interest rates drop, people avoid the linked tracks."
This means borrowers take into account not only the initial interest rate offered by the bank, but also the risk that the repayment and balance will grow over the years due to index increases. In a linked track, even if the stated interest is relatively low, an increase in the Consumer Price Index can swell the principal balance and monthly repayment.
