Olim borrow on the same terms as Israelis
Once you are an Israeli citizen, the Bank of Israel's mortgage rules apply to you exactly as they do to anyone born here. The most important ones:
| Your situation | Maximum financing |
|---|---|
| First (only) home in Israel | Up to 75% of the price |
| Replacing a home you already own (משפר דיור) | Up to 70% |
| Investment / additional property | Up to 50% |
On top of that, your monthly repayment cannot be more than half of your net income — and most banks prefer it to be well below that. The loan term can be up to 30 years.
Where olim usually get stuck
1. Proving your income
Israeli banks are used to Israeli pay slips. If you earn from abroad, work remotely, are self-employed or have just started a job in Israel, the bank will ask for more documents — and different banks treat the same income very differently. Typical requests:
- Tax returns for the last two years (for example IRS returns and W-2s, or your T4 and Notice of Assessment)
- Recent pay slips and a letter from your employer confirming your role and salary
- Bank statements from abroad and in Israel
- For a new Israeli job: your contract, and often a few months of Israeli pay slips
- US citizens — even after aliyah — also sign FATCA forms for the bank
Some banks count only part of income paid in foreign currency, because the shekel exchange rate can move. Knowing which bank is flexible for your type of income is a large part of what a broker does.
2. No Israeli credit history
New olim have little or no Israeli credit record. That is normal and not a reason for refusal, but it means the bank relies more on your documents and savings. Opening an Israeli bank account early and keeping it in good order helps.
3. Understanding Israeli mortgage "tracks"
An Israeli mortgage is not one loan with one rate. It is a mix of tracks (מסלולים), and each one behaves differently:
- Prime — variable, moves with the Bank of Israel rate; usually no early-repayment penalty.
- Fixed, not linked (קל"צ) — the same rate and payment for the whole term.
- Fixed, CPI-linked (ק"צ) — fixed rate, but the balance rises with inflation.
- Variable every 5 years — the rate resets periodically, linked or not linked.
By regulation, at least a third of the loan has to be at a fixed rate. The mix you choose decides how much you pay over the years and how exposed you are to rate rises and inflation — this is where good advice saves real money.
Oleh benefits worth checking
- Reduced purchase tax (מס רכישה) — olim can be entitled to a reduced rate on a home bought within a set period around their aliyah date.
- Eligibility certificate (תעודת זכאות) from the Ministry of Construction and Housing — can add a government-backed loan component on good terms. It is for buyers of a first home, or people who have not owned a home in the last 10 years — and it applies to everyone in the deal. Owning a third or less of an apartment does not count as owning one.
Rules and amounts change, and they depend on your aliyah date and status. Check them before you sign a purchase contract, not after.
The process, step by step
- Check what you can afford — income, equity and monthly payment, before you fall in love with an apartment.
- Get an approval in principle (אישור עקרוני) — a first answer from the banks on how much they will lend. It is usually valid for about three months.
- Sign the purchase contract — with your lawyer, making sure the payment schedule fits the mortgage timeline.
- Negotiate offers from several banks and build the right mix of tracks.
- Appraisal, insurance and collateral documents — the bank's appraiser values the property; you need life insurance, and building insurance once the building exists.
- Signing and payout — the bank transfers the money to the seller according to the contract.
How Natan helps olim
Natan works in English and Hebrew with olim from the US, UK, Canada and beyond. He knows which banks are flexible with foreign and remote income, negotiates with all the major Israeli banks for you, and explains every document in English before you sign.
