YERUSHALAYIM - The Bank of Israel is tightening its restrictions on mortgages, in an attempt to bring down apartment prices in the long term.
In the 12 months through July, more than NIS 56 billion in new mortgages were taken out, and the rate of new mortgages has not slowed appreciably, despite the BOI restrictions imposed during the past few years.
Supervisor of Banks David Zaken banned banks from granting mortgages to borrowers if the monthly payment is more than 50 percent of the borrower’s monthly income.
The new restrictions also prevent banks from approving mortgages of more than 30 years and limit the variable interest on loans to 66.7%.
Labor faction leader and former housing minister MK Itzhak Hertzog called upon the Bank rescind the order, which he branded as antisocial and unreasonable.