Refinancing

Deputy Chairman of the Mortgage Consultants Association, Avi Yusufov, explains what is behind the drop in the number of delinquencies and talks about the wave of refinancing sweeping the market: "More households have consolidated existing loans."

Bank of Israel data reveals a significant trend: the number of mortgage refinancings has reached a peak not seen since 2023. This largely explains the jump in total mortgage volume. Additionally, there is a positive indicator for the Bank of Israel: the number of those in arrears on mortgage payments is decreasing and is at its lowest level this year.

Mortgage refinancing is the process of replacing an existing loan with a new one under better terms. Given the recent decline in interest rates, experts advise borrowers to review their current mortgage agreements.

The Bank of Israel has lowered the interest rate to 3.5%, with the average non-indexed mortgage rate falling to 4.74%. However, the feasibility of refinancing depends heavily on when the original agreement was signed, as prepayment penalties often offset potential gains. The Bizportal calculator helps borrowers assess their options based on basic loan data.

Market conditions have made variable-rate loans taken during the zero-interest era significantly more expensive than current bank offerings. A proper diagnosis of your mortgage portfolio, willingness to pursue partial refinancing, and discarding myths about 'already paid interest' can save a fortune. Here is how to determine when refinancing is truly recommended.