Mortgage in Israel for New Olim: Conditions, Down Payment, Rates and Pitfalls

How much a bank lends an oleh

The Bank of Israel directive on financing limits does not distinguish an oleh from a resident: 75% for a first and only home, 70% for a buyer replacing their home, 50% for an investor. As soon as the oleh has a teudat zehut (ID card), an address in Israel and a bank account, resident rules apply. Before aliyah, with an aliyah file open, most banks already grant 70 to 75%, sometimes with the drawdown conditional on actual arrival; without that file, the non-resident regime applies, 50% in practice.

The cap is not the amount. The bank then calculates on the lower of two values, the contract price and the appraisal by the shamai (bank-approved appraiser), and checks the payment-to-income ratio: the monthly payment must not exceed 35 to 40% of the household’s net income (50% is the regulatory maximum, rarely granted). This is where an oleh’s file is decided, because the income is either foreign, or Israeli but recent.

The file with no Israeli banking history

An Israeli bank normally assesses a borrower on their current account with the bank and on the Bank of Israel credit register (netunei ashrai). An oleh has neither. To compensate, the bank asks for documents it does not ask of a resident, and it wants them before the pre-approval.

Three levers strengthen a weak file: a resident guarantor (often a parent or sibling already settled), a larger down payment (going from 75% to 65% financing often changes the decision), and statements that show savings rather than unexplained incoming transfers. Translations are into Hebrew or English; most banks accept English for payslips and statements and require a certified translation for deeds.

Foreign income, self-employed, remote work: how the bank reads them

Conversion and haircut. Income in dollars, pounds or euros is converted at the day’s rate, then reduced by 10 to 20% for currency risk. $6,000 net a month is read as about ₪18,900 instead of ₪22,200. Some banks also require that foreign income continue for at least twelve months after aliyah, which rules out a salary you are about to leave.

Employee working remotely for a foreign employer. This is the most common case among olim from the US, the UK and France. The bank accepts this income if it is regular and documented: an employment contract that mentions remote work, payslips, statements showing the transfers. It will want an Israeli accountant to have regularised the situation (a file opened with the Israeli tax authority, or payroll through an employer-of-record), because income not declared in Israel is not income in its eyes. The oleh’s ten-year tax exemption changes nothing here: exempt does not mean undeclared.

Self-employed abroad. Banks ask for two or three closed financial years and use the average net profit, not turnover, with the same haircut. A self-employed person who closes their business on arrival has no income as far as the bank is concerned: in that case, apply before aliyah on the existing income, or after six months of Israeli activity (osek murshe, tax file) with an accountant’s income confirmation (ishur hachnasot).

Pensions and investment income. A foreign pension is stable income and readily accepted; rental income abroad counts partially (50 to 70%). Dividends and irregular capital gains do not count.

For the general rules (payment-to-income ratio, age, insurance), see the mortgage guide.

Tracks and rates that suit an oleh

An Israeli mortgage is made of several tracks (maslulim). The Bank of Israel requires at least one third of the loan at a fixed rate and at most two thirds variable, of which at most two thirds on prime (the banks’ base rate, 4.75% in November 2026, i.e. policy rate 3.25% + 1.5). The usual tracks: prime, unlinked fixed, CPI-linked fixed (linked to the madad, the consumer price index), and 5-year variable.

What is specific to an oleh is the trajectory: income that moves into shekels and rises over the years, and currency risk until the transition is complete. Two practical consequences. Shorten the fixed share: an unlinked fixed over 15 years rather than 25 costs less in rate and is repaid before rates have moved, while prime carries the long term. Keep a meaningful prime share (30 to 40%), repayable without penalty when a bonus, a sale abroad or a pay rise allows it. An oleh whose income stays in dollars or pounds for the long run does the opposite: more fixed, less CPI-linked, because they already carry currency risk on the payment.

The banks’ “mortgage for olim” programs

The four big mortgage lenders each have an arrangement for new immigrants. It concerns how the file is received, not a separate rate sheet: no bank publishes “olim rates”, and a margin is negotiated file by file.

• Mizrahi-Tefahot: the country’s largest mortgage lender, with a dedicated centre for olim and non-residents and English-speaking advisers in Jerusalem, Netanya, Raanana, Modiin and Beit Shemesh; the most practised with foreign income and translated documents.
• Bank Leumi: olim account with reduced fees in the first year, mortgage file opened on discounted foreign income, short timelines when the account is already with them.
• Bank Hapoalim: olim welcome program, loans on documented foreign income, frequently asks for a short account history first (2 to 3 months).
• Discount: international unit for files coming from abroad, geared to loans from ₪1M upward; more flexible on the currency of income.

What an olim program actually brings: an adviser who can read a US tax return or a UK P60, acceptance of foreign income for one to two years, sometimes reduced file-opening fees (normally about 0.25% of the loan, negotiable) and a pre-approval without an old account. What it does not bring: a lower rate than elsewhere. Hence the point of playing two or three banks against each other.

The broker (yoets mashkanta): what they bring an oleh

A yoets mashkanta (mortgage broker) costs ₪6,000 to ₪15,000, or 0.5 to 1% of the loan. For a long-time resident with Israeli payslips, it is debatable. For an oleh it is almost always justified, for three reasons: they know which bank accepts which kind of foreign income this month (policies shift), they present the file in the format the bank expects (translations, confirmations, explanation of the down payment), and they negotiate margins on a loan the bank considers risky. On ₪1.65M, 0.2 point of margin saved over 25 years is roughly ₪45,000 in interest. Their role and fees are detailed on the mortgage broker page.

Worked example: a 4-room apartment in Netanya, ₪2.2M

The same couple, if they wait until the second spouse also has an Israeli salary of ₪12,000, will have their income read at ₪26,000 with no haircut and no currency risk, a file the bank accepts more readily and with a better-negotiated margin. The price, however, rose 8.2% in Netanya over one year: on ₪2.2M that is ₪180,000 more, i.e. ₪45,000 of extra down payment at 75%. Waiting has a cost, and it is rarely zero. The same simulation takes two minutes in the calculator, and Netanya prices neighborhood by neighborhood are on the city page.

Timelines

1. Bank account and teudat zehut: 1 week. On arrival. Without an account, no bank opens a loan file.
2. Pre-approval (ishur ekroni): 1 to 2 weeks. The bank states the amount it is willing to lend, based on income and down payment. Usually valid 24 days, renewable. For an oleh this takes longer than for a resident (2 to 5 days) because foreign documents go through a specialised desk.
3. Signing the sale contract. After the pre-approval, with a payment schedule that leaves time for the drawdown, and a financing clause where possible.
4. Final approval: 3 to 6 weeks. Property appraisal (₪600 to ₪1,500, one week), life insurance with a health questionnaire (longer after 55 or with a medical history), building insurance, loan documents signed at the branch.
5. Drawdown. Funds wired directly to the seller or developer per the schedule; a mortgage or hearat azhara (cautionary note) registered at the Tabu.

All in, 6 to 10 weeks from first application to drawdown, provided the translations are ready. The lawyer’s side of the purchase process runs in parallel.

The pitfalls specific to olim

• Signing the sale contract before the pre-approval. The seller will not wait and the contract carries late-payment penalties. An oleh whose file is declined after signing is left looking for ₪2M in a hurry. Ishur ekroni first, contract second.
• Buying before you have an Israeli account. Payments are debited from an Israeli account, and the down payment must pass through it with a readable history. Open the account on arrival, even if the purchase is a year away.
• Income not yet in shekels, and a foreign salary you are about to leave. If you resign on arrival, the foreign salary no longer counts and the Israeli salary does not exist yet. Apply before resigning, or wait for three Israeli payslips.
• A probation period in progress. Many banks wait for the end of probation (often 3 to 6 months in Israel). A contract without probation, or a letter from the employer, unblocks it.
• Forgetting life insurance. Mandatory, covering the outstanding principal; a health questionnaire, and a surcharge or refusal possible past 60. Do it at the same time as the application, not after approval.
• A fixed track that is too long, repaid too early. If you will sell a property abroad in two years to pay down the loan, put that sum on prime (no penalty), not on a 25-year fixed, whose early repayment penalty (amlat piraon mukdam) can reach several percent if rates have fallen.
• Confusing the tax benefit with the loan. The reduced purchase tax and the 75% financing are two different regimes, with two different windows (seven years for the tax, from registration for the loan). The schedule is on the buying as a new oleh page and on mas rechisha 2026.

For the total budget beyond the loan (lawyer, agent, broker, appraisal, insurance), see every fee of a purchase, and for the tax side of aliyah (ten-year exemption, tax residency), Shekel Guide.

Frequently asked questions

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