Bank of Israel limits variable rate mortgages

The Bank of Israel published a new draft directive on Wednesday to limit variable interest mortgages. The directive will apply to new loans approved from May 5, 2011.
The directive limits the part of a mortgage issued at a variable interest rate to one third of the total mortgage granted by a bank to the borrower, down from 76% today. The Bank of Israel said that the new measure would make the average mortgage 1% more expensive. The limit applies on new variable interest rate mortgages where the interest rate is likely to change in a period of less than five years.
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