Good reasons to check a refinance
- Interest rates have changed since you took the mortgage.
- Your income went up — you can pay more each month and shorten the loan.
- Your income went down, or expenses grew — you need a lower monthly payment.
- Inflation is hurting — CPI-linked tracks keep growing and you want more certainty.
- Other expensive loans (car, overdraft, personal loans) could be folded into the mortgage at a lower rate.
- Your mix no longer fits — the tracks chosen years ago do not match your plans today.
What it costs: early-repayment fees
Paying off a mortgage early in Israel can carry a fee (עמלת פירעון מוקדם). How big it is depends on the track:
| Track | Early-repayment cost |
|---|---|
| Prime | Usually small — mainly an operational fee |
| Variable (resets every few years) | Usually small if repaid on a reset date; higher in between |
| Fixed rate (linked or not linked) | Can be significant when today's rates are lower than your loan's rate |
That is why refinancing is rarely all-or-nothing. Often the smart move is to refinance only some tracks — for example the expensive fixed-rate part when the fee is low — and leave the rest alone.
Internal or external refinancing?
- Internal (מחזור פנימי) — your current bank changes the terms. Less paperwork; the bank often improves its offer once it sees a competing one.
- External (מחזור חיצוני) — a new bank lends you the money and pays off the old mortgage. More paperwork, sometimes a much better deal.
The process, step by step
- Balance statement (דוח יתרות לסילוק) from your current bank — shows each track and its early-repayment fee today. The balance changes daily, so a fresh one is needed again right before the payoff.
- Analysis — is there a real saving after fees? Which tracks are worth touching?
- Offers from your bank and from other banks, negotiated on rate and mix.
- Approval — updated income documents, a letter from your bank confirming 12 months of regular payments (אישור תשלומים סדירים), and usually an updated appraisal.
- Signing and payoff — the new loan replaces the old one.
Before you refinance, compare the total cost — what you will pay over the life of the new loan including fees — not just the new monthly payment. A lower payment over a longer term can cost you more in the end.
How Natan helps
Natan reads your balance statement, calculates whether refinancing actually saves you money after fees, and negotiates with your bank and its competitors. In English or Hebrew — and if the numbers do not work, he will tell you to wait.
