New mortgages up in June

Mortgage taking rose 9.8% in June, compared with June 2013, the Bank of Israel reported today.

Mortgages taken in June totaled NIS 4.6 billion, compared with NIS 4.19 billion in June 2013 and NIS 4.45 billion in May 2014.

NIS 2.6 billion of the mortgages taken in June were at variable interest, and NIS 2 billion were at fixed interest.

The mortgage market has been booming for a long time, with last year breaking the record for total mortgages taken. The Bank of Israel imposed a series of restrictions on the market involving the volume of leverage and the customer's repayment capability, and the reserve fund that the banks must retain in granting mortgages. These measures did not cool the market off, but the bank's mortgage portfolio is currently considered less risky than in the past. At the same time, the Bank of Israel is still perturbed by the state of the market, and the imposition of further restrictions cannot be ruled out.

What the Bank of Israel finds most disturbing is a scenario of a higher interest rate, combined with a rise in unemployment, which would have a negative impact on the customers' repayment capability. On the other hand, the bank asserts that under all the stress tests conducted to simulate a risk scenario, no damage to stability was recorded.

Published by Globes [online], Israel business news - www.globes-online.com - on July 13, 2014

New mortgages up in June

Mortgages taken in June totaled NIS 4.6 billion, up from NIS 4.45 billion in May 2014.