The average mortgage taken by Israelis in May set a record - NIS 879,000

The average mortgage taken by Israelis from the banks in May set a new record - NIS 879,000. This is compared to an average mortgage of NIS 866,000 in April and NIS 797,000 in May 2020. In the last five years, the average mortgage has risen by 30%, while the price of an average apartment has risen by only 15%, according to the Central Bureau of Statistics.
Data from the Bank of Israel published today (Wednesday) join the report of a record total of mortgages in May, which stood at NIS 9.5 billion. The number of loans for the purchase of an apartment amounted to 10,773 loans in May, slightly lower than the record broken in March last year - 11,138 loans (totaling NIS 8.68 billion), when many Israelis stormed the banks following the corona and feared the money tap would close.
According to the data, the number of Israelis deferring mortgage payments continues to decline. 6.5% of loans, totaling NIS 27 billion, are currently in the status of deferral with the banks.
In April, the rejection rate was 6.9%, at the end of 2020 it was 12%. In May last year, against the background of the great concerns and the shutdown of the economy following the corona plague, the rejection rate was 25% and a total of NIS 96.5 billion.
Of the total mortgages in May, NIS 1.3 billion was taken out for the purchase of an apartment for investment, by 1,473 borrowers and for an average mortgage of NIS 763,000. It is important to note that according to the directives of the Bank of Israel, a mortgage for the purchase of an apartment for investment can be at most 50% of the value of the property, compared with 75% for first-time home buyers and 70% for housing developers.
In May, there was a slight decrease in the mortgage rate on financing of more than 60% of the value of the property. 42.8% of the total loans were taken out with financing of at least 60%, compared to 44% in April. In any case, these are still record levels compared to recent years and up from 39% in May 2020.