January: only 8% of mortgages were frozen or deferred compared with 12% last month

Mortgage freezers are repaying them: Bank of Israel data released today show that as of the end of January, only 8% of mortgages were frozen or deferred, compared with 12% last month and 25% of mortgages at the height of the crisis in April last year.
The data show that the volume of mortgages that are deferred payments decreased during January by NIS 17 billion, and as of the end of January it stands at NIS 32.1 billion. This is the lowest figure since the outbreak of the corona crisis, and is still high compared to routine. For comparison, in February last year, the volume of mortgage deferred payments was NIS 12.5 billion, less than 3.5% of the market.
The sharp decline recorded in January is due to the fact that the mortgage freeze period for most borrowers ended at the end of December. Although there is a new outline for deferring payments, it seems that a significant proportion of borrowers are already in a situation where they can return to repaying the payments as usual, and do not need further deferral. It will also be recalled that in contrast to previous plans that included a loan freeze, this time it is a partial repayment of the mortgage, and banks note that this transition is made smoothly, and the vast majority of borrowers manage to meet the partial payment.
The Bank of Israel also shows that, as published this morning in Calcalist, the volume of new mortgages granted in January was NIS 6.4 billion, similar to the average in the last 12 months. There was an increase in the volume of activity of investors, whose share of the mortgage market was 13.3% in January, compared with less than 11% in the past year. On the other hand, there was a slight decrease in the activity of home buyers under the "price per occupant" program - their share of the market in January was less than 12% compared to 15% in the past year.
During January, the reform came into force, according to which it is possible to take out a mortgage with a prime component of up to two-thirds of the mortgage (compared with one-third before the decision on relief). The impact of the reform is still not reflected in the data for the past month, as taking out a mortgage is a process that takes a certain period of time, and the reform took effect only in mid-January. The average interest rate on mortgages has remained stable, but the reform in the prime interest rate, as well as the declines in the bond market, may affect the average interest rate seen next month.