Prime-Rate Mortgages Surge to 23% of Market in September, Bank of Israel Says
Bank of Israel data shows prime-rate mortgages surged to 23% of total housing loans in September, reaching 2 billion NIS amid falling interest rates.
The comeback of the prime-rate track in the mortgage market is gathering momentum: in September, mortgages linked to the prime rate were taken out in the volume of approximately 2 billion NIS, accounting for 23% of total housing mortgages—the highest rate since April 2023, according to Bank of Israel data released on Sunday.
The figures reflect a sharp shift in borrower preferences in recent months, against the backdrop of interest rate cuts in the economy. Just in January of this year, the share of the prime track stood at only 11.1% of total mortgages, and in September of last year, it stood at only 9% (799 million NIS)—similar to October of last year and a small distance from the low level of September 2024, when it dropped to just 7%.
Despite the recovery of the prime track, the public continues to shun CPI-linked tracks, which recorded a low of over five years in September. During the past month, CPI-linked mortgages were taken out in the volume of only about 790 million NIS—9.1% of total housing mortgages, compared to 14.1% in September of last year and 21.5% in September 2024.
Looking at the market as a whole, the volume of housing mortgages taken out in September totaled about 8.67 billion NIS (and 9.12 billion NIS including all-purpose loans). This represents a sharp monthly drop of 20.5% compared to August, during which mortgages totaling 10.9 billion NIS were taken out, and a slight decrease of 2.1% compared to September of last year.
