Mortgage Credit in Israel: 14% Volume Increase in 2026 Driven by Larger Loans

Israeli mortgage lending accelerated significantly in 2026. But behind the spectacular rise in volumes lies a more nuanced reality: Israelis are not buying many more homes, but are mostly borrowing more for each property. Whether you are financing from abroad or already living in Israel, these figures shed light on what banks are currently granting and what a loan truly costs.

Record Credit Volume Since January

According to the review by the Association of Credit Advisors, reported by Nadlan Center on September 30, 2026, the volume of housing credit has reached ₪79.6 billion since the beginning of the year, an increase of 14% year-on-year. Including all-purpose loans secured by property, the total rises to ₪84.2 billion.

The Bank of Israel confirmed this trend in its press release of September 1: the pace of new real estate loans is around ₪10 billion per month, seasonally adjusted, with a moderate increase in transactions in May-June, especially in new properties.

Bigger Loans, Not More Loans

This is the main takeaway from the review. Between March and July 2026, the volume increased by 10% compared to the same period in 2025. According to the Association of Credit Advisors, 7 points of this growth come from the rise in the average amount borrowed, and only 3 points from a higher number of applications.

Source: Association of Credit Advisors, via Nadlan Center.

The increase is especially notable for rental investments. Several factors may explain this: proportionally lower down payments, extended payment terms offered by developers, or properties being purchased at higher prices despite overall price stability. These assumptions should be confirmed on a case-by-case basis with your broker.

Rates, Prime Share, and Actual Loan Cost

In August, according to the same review, the average weighted nominal rate stood at 4.38%, compared to 4.34% in July. The weighted expected rate, which includes anticipated inflation on indexed portions, reached 5.07%, up from 4.97%. The share of the prime rate portion increased from 22% to 24%.

This slight apparent increase may be surprising, given that the Bank of Israel lowered its key rate to 3.25%. This is explained by the composition of loans: the distribution between fixed, variable, and indexed portions weighs as much as the level of the key rate. Our article on the impact of the 3.25% rate on monthly payments details this mechanism.

Price and Risk: What Other Indicators Say

The same review indicates that housing prices are up 0.2% over one month and down 1.2% over one year. The Central district shows a decrease of 3.2%, while the North and Jerusalem gain about 1%.

Payment arrears remain contained: ₪4.102 billion, or 0.61% of outstanding loans, according to the Association of Credit Advisors. The banking system therefore does not show major stress, but higher monthly payments reduce households' safety margins, especially if interest rates were to rise.

What This Means for Your Financing

For an Israeli already living in Israel, these figures call for a precise calibration of borrowing capacity. A higher loan means increased sensitivity to rate changes, especially on the prime portion. For a buyer from abroad, Israeli banks often apply specific conditions for non-residents, particularly regarding the loan-to-value ratio: these should be checked in advance. The appreciation of the shekel—about 10% against the dollar over one year according to the Times of Israel—also raises the amount of foreign currency needed for the down payment.

A few practical steps:

- Estimate your monthly payment and borrowing capacity with our financing simulator.
- Check the available budget by city with the city budget simulator.
- Factor in the total cost: 18% VAT included for new builds, purchase tax (Mas Rechisha) to be confirmed based on your profile, closing costs of 10 to 13%, detailed in the taxes and fees simulator.

The broker compares offers and structures the loan mix; the lawyer checks the financing clauses in the developer contract and the guarantees; the architect ensures the property matches the plans, to avoid any surprises during the bank's appraisal. These three experts—lawyer, broker, and architect—work together to secure your transaction.

In summary

Mortgage lending in Israel is mainly increasing through larger loan amounts. The current trend of lower rates is favorable, but careful structuring remains essential. To put these numbers in perspective, check out our weekly overview, explore our 300+ new developments across Israel, and request a personalized assessment with no obligation.

Sources

- Nadlan Center — Mortgage Credit Review, Association of Credit Advisors (09/30/2026)
- Bank of Israel — Monetary Policy Press Release (09/01/2026)
- Times of Israel — Housing snapshot, September 2026