The Bank of Israel has introduced a temporary directive that enables customers to increase their mortgage loans by up to NIS 200,000 ($55,500). The purpose of this loan is to alleviate suffocating debt for households and facilitate the construction of Merkhav Mugan (protected space) in old apartments.
Under this directive, borrowers can obtain additional credit against the lien of their residential apartment, with the maximum financing rate in mortgages increasing from 50% to 70% of the apartment's value. The plan will be valid until March 31, 2024.
Another provision in the directive addresses the need for Merkhav Mugan construction following the war in Gaza. Borrowers can obtain loans of up to NIS 200,000 for the specific purpose of this kind of construction, with exemptions from regulatory restrictions such as financing rates and repayment ratios. This exemption applies when a construction permit is granted through an expedited procedure announced by the Home Front Command and the Planning Director.
According to the Bank of Israel's draft, the condition for receiving the loan is that the additional amount should not exceed NIS 200,000, beyond the existing 50% financing rate. These funds can be used for various purposes, including reducing overdrafts, covering urgent medical expenses, financing studies, or any other personal need.
The BOI's initiative aims to provide relief to borrowers burdened by suffocating debt and support the construction of Merkhav Mugan in older apartments. The temporary directive allows for increased mortgage loans and exemptions from certain regulations, providing much-needed assistance to households facing financial challenges.