Residents of the Center Pay Less in Mortgage Interest, Study Shows

YERUSHALAYIM -
View of the Ayalon highway in Tel Aviv. (Miriam Alster/Flash90)

The farther you live from Tel Aviv, the more you pay in mortgage interest, the Bank of Israel has determined in a study. Residents of the city and its suburbs pay the least in mortgage interest, while those who live within 40 kilometers of the region pay between 1.46% and 1.65% more than residents of the center. Those who live up to 80 kilometers away pay between 1.63% and 2.01% more.

The study was based on data culled from 80,000 mortgages taken by Israelis between 2010 and 2013. The study was conducted in order to determine the risk factors for mortgage seekers, including the impact of geographical factors on the ability of borrowers to repay mortgages.

Among the reasons cited for the lower costs in the center of the country was the preponderance of competing banks and institutions willing to offer loans in the region. The study found that the more such institutions there were the greater the competitiveness in interest rates. In areas where there were fewer institutions, purchasers had less recourse and were forced to pay higher rates, the Bank study found.