Proportion of variable mortgages to drop to a third in next few months
Photo: Index Open
June sees 15% drop in new mortgages
Bank of Israel reports banks granted new mortgages totaling some NIS 4.1 billion last month – about 82% of which were variable interest rate mortgages
The value of new mortgages granted by banks in June totaled some NIS 4.1 billion (about $1.2 billion) – a 15% drop compared to June 2010 and May 2011, according to official figures released Tuesday by the Bank of Israel.
Mortgage financing in the past 12 months totaled some NIS 50.2 billion ($14.5 billion).
According to the figures, approximately 82% of June mortgages were variable interest mortgages, whereas these mortgages made up about 88% of May's mortgage financing.
In May, the Bank of Israel's new directive restricting variable interest mortgages to a third of the new mortgages came into effect; however, the May and June mortgage figures did not reflect the new directive due to the fact that the directive does not apply to clients who received mortgage proposals before the law came into effect and who completed their mortgages deals in the last two months.
In the next few months, the proportion of the variable mortgages will drop to a third, as per the central bank's orders.
On Tuesday, the Bank of Israel reported that the average interest rate on index-linked mortgages has been climbing for the past eight months to 2.97% – the highest in two years.
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