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The average interest rate on Israeli mortgages continued to climb in November and reached 4.04%, compared to 3.88% in October.

November was the fourth month in a row that the rates have risen, are now 0.56% higher than in July. This means new home buyers are now paying more every month.

The Bank of Israel published the figures at the end of last week and the numbers include the weighted averages of all the banks and all types of mortgages.

Despite the large cuts in interest rates by the Bank o Israel, 1.75% in under three months, mortgage interest rates continued to increase, even though the Israeli base interest rate is now only 2.5%, the lowest in history.

The reason for the increase in mortgage rates is a larger cut taken by the banks during this time of financial crisis.

The interest rates on long-term mortgages for over 20 years increased the most, to 4.83%, up from 4.68% the month before. This is 0.8% above the rate in May. This would raise a NIS 3,000 monthly payment by about NIS 215 a month.

The increases would in actuality be even higher because they do not take into account the high inflation through most of the year, which would further up monthly payments of CPI-linked mortgages.

However, the banks are finding it harder to raise money for the long-term and are also having to pay more for it, and they consider mortgage lending to be riskier now than before due to the economic slowdown and fears that borrowers will be unable to pay back their housing loans.

The banks have also made it harder to get a mortgage, and when they do give one, they now limit the total to only 60% of the value of the home, compared to 80%, or even 90%, only six months ago before the crisis hit hard.