Israel Sets New Mortgage Restrictions After Home Prices Jump 5%

On mortgages covering 45% to 60% of the property value, banks will need to set aside 50% in capital instead of 35%, while for those covering more than 60% banks will have to set aside 75%.

The Bank of Israel said Tuesday it was imposing new restrictions on home loans, just hours after the government reported that home prices had jumped 5% last year. In a draft directive presented by banks commissioner David Zaken, lenders will have to boost their capital buffers on mortgages exceeding 45% of the property value.