BREAKING NEWS

BoI exempts foreigners from mortgage restrictions

By OMER RABIN / GLOBES

MAY 5, 2011 17:04

The new restrictions by the Bank of Israel limiting variable exchange rate mortgages to one third of the total mortgage came into effect this morning. However, yesterday the Bank of Israel published a document entitled "Variable Interest on Home Loans" which revealed that foreign residents will be exempt from the new regulations.

Most of the principles in the document are no surprise and were set out last week by Governor of the Bank of Israel Prof. Stanley Fischer. But the document clearly states that regarding home loans taken by foreign residents in foreign currency, the loan taker can freely decide the level of variable interest contained within the loan.

The new mortgage directive also exempts bridging loans in which the period of the original repayment is up to three years on multi-purpose loans of up to NIS 100,000. This is on condition that the bank itself retains the difference of less than 33.3 percent between the variable interest rate loan and the overall loan on the home.

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