Mashkanta in Israel: How an Israeli Mortgage Works
An Israeli mortgage is usually divided into several tracks, each with its own interest, indexation and reset rules. The first payment alone does not describe the full risk.
Known limits: Actual pricing, documentation and approval depend on the bank, borrower, property and market conditions.
Update policy: Material rule changes and corrections are logged on the version-history page.
The process in plain English
- Request approval in principle (ishur ekroni). Banks must use a standardized format and generally respond within 5–7 business days.
- Compare the three uniform baskets. Banks also may present a customized basket.
- Check the forecast figures. Compare first payment, highest expected payment, forecast total interest and total forecast payment.
- Complete appraisal and legal checks. The accepted property value affects LTV.
- Sign and register the security. The registration route depends on whether rights are in Tabu, the Israel Land Authority or a housing company.
Common mortgage tracks
| Track | What can change | Main planning risk |
|---|---|---|
| Fixed, unlinked | Rate is fixed; no CPI linkage | Higher initial rate can buy payment certainty; early-repayment exposure may apply. |
| Fixed, CPI-linked | Rate fixed; principal linked to CPI | Balance and payment can rise with inflation. |
| Prime-linked | Rate changes with prime | Payment can rise when monetary rates rise. |
| Variable, CPI-linked or unlinked | Rate resets at stated intervals; linked versions also move with CPI | Future reset and indexation can change payment and balance. |
Worked payment example
A simple constant-rate amortization model produces about ₪2.24 million of total interest before insurance, indexation, fees or rate changes. Use the mortgage calculator to change the assumptions.
Rules that shape the offer
- Maximum LTV: 75% single dwelling, 70% replacement dwelling, 50% investment dwelling.
- Maximum term: 30 years.
- Payment-to-income cannot exceed 50%; the 40%–50% range is treated as high risk.
- At least one-third must be fixed-rate; up to two-thirds can be variable-rate.
Official source: Bank of Israel mortgage transparency reform and glossary.
Frequently asked questions
What does mashkanta mean?
Mashkanta is the Hebrew word commonly used for a mortgage secured against real estate.
What is an ishur ekroni?
It is an approval in principle: a standardized bank document presenting an approved mortgage quote, uniform comparison baskets and forecast payment information.
How long can an Israeli mortgage be?
The Bank of Israel framework limits the final term to 30 years.
Can the entire mortgage be variable rate?
No. The regulatory framework requires at least one-third of the housing loan to be fixed-rate, leaving up to two-thirds variable-rate.