|SOFR (3 mo)||30||+3%|
|SOFR (5yr fixed)||25||7.8%|
|Fixed NIS (unlinked)||10||4.95%|
|Fixed NIS (unlinked)||15||4.85%|
|Fixed NIS (unlinked)||20||4.75%|
|Fixed NIS (unlinked)||25||4.80%|
|Fixed NIS (unlinked)||30||4.90%|
|Fixed – Dollar||10||7.5%|
|Fixed – Euro||10||6.5%|
(Last update to the Israel mortgage rates box above was on May 31, 2023.)
**The Israel interest rates quoted above do not represent a commitment in any way and are for illustrative purposes only.
Rates vary greatly depending on LTV (loan-to-value), purpose of the loan, location of the property, and the borrowers qualifications.
For a customized rate quote please contact a First Israel mortgage consultant on the form below. We look forward to hearing from you.
Contact First Israel Mortgage on the form below
Current Israel mortgage rates: How the table above works
As mortgage brokers, it is our job to know what the current interest rates are in Israel.
We are fortunate to love what we do, and pride ourselves on being fully versed on the current Israel mortgage rates.
On the left hand side of the box is the product you may be looking at. e.g. Prime, Libor or variable or fixed.
The middle column is the term in years. So, how long you may be taking the loan for.
The right hand column features the actual rate you can expect to receive from a bank right now.
We do our utmost to make sure this page is updated and correct as of the date featured directly underneath the box.
Explaining all the products available for your mortgage in Israel
A mortgage linked to the interest rate of the Bank of Israel. The interest rate of Prime, changes according to changes in the Bank of Israel rate.
During low interest conditions – as they were up until April 2022 – the interest paid is very low.
However, if the Bank of Israel rate rises, as we have seen in the latter half of 2022 and early part of 2023, the interest rate can rise rapidly.
In order to manage the risk, the Bank of Israel limits the Prime rate to be a maximum 66% of a mortgage.
The official description of the Prime rate by the Bank of Israel is: A rate linked to the Bank of Israel interest rate plus a spread of 1.5%, and it is not indexed to the CPI (Consumer Price Index).
Prime rate in Israel: 2018-2023
|Date||Prime rate in Israel|
|May 22, 2023||6.26%|
|May 11, 2023||5.88%|
|April 21, 2023||5.35%|
|December 7, 2022||4.74%|
|November 5, 2022||3.87%|
|September 10, 2022||3.37%|
|August 6, 2022||3.11%|
|June 4, 2022||3.01%|
|May 7, 2022||2.98%|
|March 5, 2022||2.99%|
|January 18, 2022||3.04%|
|August 28, 2021||3.11%|
|August 7, 2021||3.11%|
|June 19, 2021||3.23%|
|May 29, 2021||3.21%|
|February 15, 2021||3.22%|
|September 19, 2020||3.26%|
|July 25, 2020||3.29%|
|May 26, 2020||3.46%|
|January 27, 2020||3.49%|
|October 29, 2019||3.52%|
|June 15, 2019||3.56%|
|May 18, 2019||3.59%|
|April 20, 2019||3.59%|
|April 6, 2019||3.59%|
|February 16, 2019||3.58%|
|December 22, 2018||3.42%|
|November 26, 2018||3.41%|
|September 22, 2018||3.49%|
|(Note: updated May 29, 2023)|
The LIBOR rate stands for “London Inter Bank Offered Rate” and is published once a day by the British Bankers’ Association (BBA). This represents the interest rate at which banks are willing to lend each other.
The LIBOR interest rate is used as the most common interest rate for short-term loans (up to 12 months).
The LIBOR rate fluctuates daily based on market conditions and is often used as a benchmark for adjustable-rate mortgages (ARMs).
A mortgage where the interest rate can change over time based on market conditions.
If the market interest rates go up, your monthly mortgage payment will also go up, and if the rates go down, your payment will go down as well.
Usually, variable loans see changes set every few years. This is in accordance and agreed between the bank and the customer. Commonly 1, 2 or 5 years.
Often the anchor interest rate according to which the interest rate changes, is usually that of government bonds.
Variable rate loans are generally CPI-linked.
A mortgage where the interest rate remains the same for the entire term of the loan.
As a result, your monthly mortgage payment will remain the same throughout the life of the loan, regardless of market conditions.
Fixed-rate mortgages provide more stability and predictability than variable-rate mortgages, but may come with a higher initial interest rate.
Many clients choose a fixed rate for at least part of their mortgage, since the monthly repayment remains consistent throughout the period.
An entire loan can be taken at a fixed interest rate. However, the fixed rate is usually higher than the variable rate.
The current Bank of Israel interest rate in Israel
Bank of Israel interest rate as of July 10, 2023: 4.75%
Next decision date: September 4, 2023
Summary of most recent Bank of Israel decision: Having made 10 consecutive rate hikes, the Bank of Israel finally put the breaks on and did not move the interest rate.
The rate of 4.75% is still the highest since 2006.
We now wait until early September, to see how things pan out domestically as well as internationally, specifically in America. There has been predictions that the final couple of quarters of 2023 will see interest rate decreases.
Month by month breakdown of interest rate changes in Israel, 2017-2023
|Date||Change in interest rate||Rate|
|July 10, 2023||Unchanged||4.75%|
|May 22, 2023||Increase by 0.25 percentage points||4.75%|
|April 3, 2023||Increase by 0.25 percentage points||4.5%|
|February 20, 2023||Increase by 0.5 percentage points||4.25%|
|January 2, 2023||Increase by 0.5 percentage points||3.75%|
|November 21, 2023||Increase by 0.5 percentage points||3.25%|
|October 3, 2022||Increase by 0.75 percentage points||2.75%|
|August 22, 2022||Increase by 0.75 percentage points||2%|
|July 4, 2022||Increase by 0.5 percentage points||1.25%|
|May 23, 2022||Increase to 0.75 percentage points||0.75%|
|April 11, 2022||Increase to 0.35 percentage points||0.35%|
|February 21, 2022||Unchanged||0.1%|
|January 3, 2022||Unchanged||0.1%|
|November 22, 2021||Unchanged||0.1%|
|October 7, 2021||Unchanged||0.1%|
|August 23, 2021||Unchanged||0.1%|
|July 5, 2021||Unchanged||0.1%|
|May 31, 2021||Unchanged||0.1%|
|April 19, 2021||Unchanged||0.1%|
|February 22, 2021||Unchanged||0.1%|
|January 4, 2021||Unchanged||0.1%|
|November 30, 2020||Unchanged||0.1%|
|October 22, 2020||Unchanged||0.1%|
|August 24, 2020||Unchanged||0.1%|
|July 6, 2020||Unchanged||0.1%|
|May 25, 2020||Unchanged||0.1%|
|April 6, 2020||Reduction by 0.15 percentage points||0.1%|
|February 24, 2020||Unchanged||0.25%|
|January 29, 2020||Unchanged||0.25%|
|November 25, 2019||Unchanged||0.25%|
|October 7, 2019||Unchanged||0.25%|
|August 28, 2019||Unchanged||0.25%|
|July 8, 2019||Unchanged||0.25%|
|May 20, 2019||Unchanged||0.25%|
|April 8, 2019||Unchanged||0.25%|
|February 25, 2019||Unchanged||0.25%|
|January 7, 2019||Unchanged||0.25%|
|November 26, 2018||Increase by 0.15 percentage points||0.25%|
|October 8, 2018||Unchanged||0.1%|
|August 29, 2018||Unchanged||0.1%|
|July 9, 2018||Unchanged||0.1%|
|May 28, 2018||Unchanged||0.1%|
|April 16, 2018||Unchanged||0.1%|
|February 26, 2018||Unchanged||0.1%|
|January 10, 2018||Unchanged||0.1%|
|November 27, 2017||Unchanged||0.1%|
|October 19, 2017||Unchanged||0.1%|
|August 29, 2017||Unchanged||0.1%|
|July 10, 2017||Unchanged||0.1%|
|May 29, 2017||Unchanged||0.1%|
|April 6, 2017||Unchanged||0.1%|
|February 27, 2017||Unchanged||0.1%|
|January 23, 2017||Unchanged||0.1%|
Interest rates in Israel 2022
The first three months of 2022 began in the same manner that 2021 had finished.
On February 21, 2022, the Bank of Israel’s Monetary Committee decided to keep the interest rate unchanged at 0.1%.
However, on April 11, 2022, the dial moved, with an increase in the interest rate to 0.35%.
The main reason given for this increase was due to an inflation increase in Israel and the Bank of Israel was pretty clear even in April 2022, that we should expect “a gradual process of increasing the interest rate”.
From there, things moved along the process that had been warned by the Bank of Israel.
In April 2022, the interest rate moved to 0.75%. In July 2022, the interest rate increased by 0.5% to 1.25%.
August 2022, saw a bigger leap, of 0.75%, to 2 percent. October and November saw more jumps, of 0.75 and 0.5 respectively, to leave the interest rate at the end of the calendar year to stand at 3.25 percent.
The Bank of Israel highlighted inflation to be “above the upper band of the target range” and that “inflation can be seen across the board in a wide range of CPI components.
Interest rates in Israel 2021
During 2021, the Bank of Israel made no less than eight announcements regarding the interest rates.
On each occasion, the Bank of Israel simply announced that the monetary committee had decided “to keep the rate unchanged at 0.1 percent”.
For the eagle-eyed amongst you, these announcements came in January, February, April, May, July, August, October and November.
Despite still coping with the COVID-19 virus and everything else that entailed, Israel enjoyed an expansion of economic activity during 2021.
At the end of 2021, the Bank of Israel did expect the inflation rate to be lower “in 12 months from now.”
Also at the end of 2021, the Bank of Israel estimated that growth over the past 12 months had been at around 6%.
During this period, there had also been a sharp appreciation of the Shekel. And, house prices increased about 10%.
General trends of Israel’s interest rate since 1948
In Israel, interest rates have a long history of volatility, with extreme highs and lows over the years.
Since its early years, Israel has dealt with high inflation, leading to skyrocketing interest rates. During the mid-1980s, interest rates reached as high as 450%! This period is generally referred to as the time of hyperinflation.
In 1985, a stabilization program attacked the root causes of the hyperinflation and inflation fell from the highs of 450% back down to 20% by the start of 1986.
Since then, Israel has implemented several economic reforms to combat inflation and stabilize the economy.
A gradual reduction of interest rates
These reforms have led to a reduction in government spending and a tightening of monetary policy, which has helped bring inflation under control and interest rates down.
In more recent years, interest rates in Israel have remained relatively low, hovering around 5-10% throughout the 1990s and early 2000s.
In response to sluggish economic growth and low inflation, the Bank of Israel has gradually reduced interest rates, with the benchmark rate standing at a low 0.1% as of September 2021.
If you’re in the market for a mortgage, our team can help you find the right loan for your needs at a competitive interest rate. We work with a variety of lenders to offer you the best possible rates and terms.
Contact us today to learn more about our mortgage lending services and how we can help you achieve your homeownership dreams.
The rate of inflation in Israel 2021-2023
|Date||Rate of inflation|
Also worth checking out:
Frequently Asked Questions about current interest rates in Israel
Current Interest Rates
The most commonly used mortgage rates in Israel are Prime, LIBOR, Variable and Fixed.
Rates vary greatly depending on LTV (loan-to-value), purpose of the loan, location of the property, and the borrower’s qualifications. For a customized rate quote please contact a First Israel mortgage consultant on the form above. We look forward to hearing from you.