Taking a mortgage? This is the average mortgage in Israel (November – December 2022)

The mortgage market is shrinking, but the average mortgage is still high. Furthermore, those who qualify for a tenant price increase the average mortgage amount. Let’s see why this happens and what is expected next.

They take mortgages – but less

Many factors, including the increase in interest rates, produce a change in the dynamics of the mortgage market in Israel. Among other things, the number of mortgages is numerically small. Also, the amount of money requested by the general public that needs mortgages is correspondingly smaller. But what does this mean in practical terms? We checked the latest data, and discovered that still, the scope of the average mortgage in Israel is large, perhaps even dangerously large .

As of November December 2022, you can see a dramatic contraction in the demand for mortgages. This is partly due to the jump in interest rates that we saw this year, but also from the expectations of a change in the trend in apartment prices . Senior officials in the banking system predict that in the next year or two, housing prices will begin to fall. The buying public is definitely on the fence, and the numbers don’t lie. The number of people who took out mortgages in November was nearly 40 percent lower than in November last year. The data available so far for December supports the duration of this trend. But at the same time, the total amount of money raised in mortgages decreased, but not at the same rate but less. This means that some borrowers actually increased the total mortgage. how does it happen? The explanation lies in the government benefits such as the price for the tenant.

A mortgage of between a million and a million and a quarter

The latest statistics of an average mortgage in Israel indicate an amount of close to a million shekels. The exact number recently published is NIS 980,000. This is a decrease of almost ten percent in relation to the average mortgage amount that the public in Israel took out earlier this year (2022). But it should be noted that this is an average mortgage of housing mortgages, and not for investment purposes. In fact, the average amount could be even lower, if we did not include those entitled to benefits such as apartment grills at the “resident’s price”. In November, the numbers show, within the framework of mortgages of a price per tenant, the average mortgage reached one million and a quarter shekels. This is about crossing the record of the average mortgage ever in Israel.

Afraid of losing the benefits

Experienced mortgage advisors explain what appears to be a contradiction in data. How does it work out that the buyers of discounted apartments in the eligible sale are the ones who take the highest mortgage amounts in the economy? The answer is that, in light of the price increases of the last few years, those who are eligible not only pay sale prices but also managed to avoid the most dramatic price increases. According to the estimates, if in the past those entitled to a price for a house enjoyed a discount of about 30 percent on the market price, today it reaches much more. Those eligible who took out the mortgages these days enjoyed a discount of about 40 percent compared to the market price. This means that despite the signs of recession and despite the higher interest rates, they choose to make every effort in order not to miss the deal. This is even if this involves an abnormal volume of mortgages by any standard.

Compared to a tenant who is entitled to a price, it turns out that the real estate investors these days prefer to show caution in the scope of mortgages. Numerically, you can see fewer investors getting into the game these days. And those who decide to purchase an apartment for investment at this time, prefer to stay at the level of an average mortgage of only about 950 thousand NIS.

So what can we expect next year? As it turns out, we are expecting two opposing forces and it is difficult to estimate which of them will be stronger. On the one hand, against the backdrop of economic indicators, high interest rates and inflation, the public is expected to tighten their belts and avoid inflated mortgages. On the other hand, if a drop in housing prices does materialize, as we haven’t seen in years, it is possible that not only those entitled to a price per tenant will fuel the industry and generate strong demand for additional mortgages.


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