What does a person do when he is out of work and has a mortgage payment due? In Israel, he contacts his bank to ask for a “pass,” a month or two off from paying the mortgage until they find a job.
It turns out that all mortgage banks in Israel do have a policy on grace periods, during which payment and interest are suspended – and in the interest of ensuring that all mortgage-holders are treated fairly, Kulanu MK Roni Falkman has proposed legislation that codifies grace periods at all banks. According to the law, which was approved for legislation by the Ministerial Law Committee, payments can be delayed for periods of between three months and a year, accumulated over the life of the mortgage. No additional interest will be charged for the delayed period; the mortgage will simply be extended and treated as if the original payments and interest were in place.
According to Falkman, the legislation will help Israelis who hit a bump in the road, relieving them of one extra worry – that a lack of payment will eventually lead to the bank’s evicting them and taking their house. “Mortgages are long-term commitments that are difficult for many to pay back,” he said in comments attached to the law. “Life is dynamic and full of surprises, and this law will ensure that those surprises do not bankrupt a homeowner.”