The global crisis is about to slam into Israel's property market: Now that there is a whole new appreciation of risk, Israel's banks are thinking of raising interest rates on mortgages.
Bank Leumi this week cut maximal funding to homebuyers to 70% of the asset price. Until now, buyers could borrow as much as 85% to 90% of the home's price. A spokesman for Leumi confirmed that the bank is also thinking of raising interest rates on new mortgage loans.
First International Bank is also considering hiking rates applicable to new loans to home buyers. Mizrahi-Tefahot has gone one better: It has already raised rates on fixed-interest and linked mortgages by 0.15% to 0.3%, depending on the loan's lifetime.
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