In recent years, purchasing real estate in Israel has become increasingly attractive to foreign buyers. This trend is driven by geopolitical changes, rising property demand, and the desire for secure investments. Whether you are an investor looking for a stable market or planning to relocate to Israel, the real estate sector continues to offer excellent opportunities.
However, obtaining a mortgage in Israel as a foreign buyer is more complex than for Israeli citizens. It requires a clear understanding of the specific requirements imposed by banks and financial institutions.
This guide covers eligibility criteria, required documents, recommended mortgage options, and essential tips to help you navigate the process successfully.
📌 Everything you need to know before applying for a mortgage in Israel – let’s get started! 🚀
Why Buy Property in Israel with a Mortgage?
✔ Property values in Israel increase by an average of 4% per year.
✔ Mortgage interest rates in Israel are relatively low compared to other countries.
✔ The Israeli real estate market is stable and in high demand.
✔ Housing supply is limited due to population growth and immigration.
✔ With 50% bank financing, rental income can often cover mortgage repayments.
Eligibility Criteria for Foreign Buyers
Israeli banks offer mortgages to foreign buyers, but with stricter conditions:
✔ Maximum financing of 50% of the property's value (compared to 75% for Israeli citizens).
✔ Higher interest rates – it is recommended to compare offers to secure the best terms.
✔ A significant down payment is required.
✔ You must open a bank account in Israel.
✔ Signing must take place in Israel or be completed through a notarized power of attorney.
Required Documents for a Mortgage Application
To apply for a mortgage, you will need to provide:
✔ A valid passport and, if applicable, a local identification document.
✔ Proof of income for the last three years.
✔ Bank statements from your country of residence.
✔ A detailed declaration of assets.
✔ Certification from a local tax advisor confirming your income.
✔ Notarized translation of all documents into Hebrew or English.
Recommended Mortgage Options
Foreign buyers can choose from several mortgage options:
✔ Loans linked to a foreign currency (USD/EUR) to reduce exchange rate risks.
✔ Fixed-rate mortgages to protect against market fluctuations (check for early repayment fees).
✔ A combination of different mortgage types to balance financial risk.
Tax Considerations for Mortgages and Property Purchases in Israel
It is important to understand the tax implications:
✔ Purchase tax is applied based on the annual rates set by Israeli authorities.
✔ Tax obligations in your home country may also apply.
✔ Potential tax deductions between Israel and your home country (if a tax treaty exists).
✔ Mandatory tax reporting in your home country, if required.
Mortgage Application Process
1️⃣ Gather all required documents in your home country.
2️⃣ Translate and notarize documents (this may be done through the lending bank).
3️⃣ Open a bank account in Israel.
4️⃣ Submit the mortgage application directly to a bank or through a mortgage broker.
5️⃣ Wait for approval – the process is generally longer than for Israeli citizens.
Essential Tips for a Successful Mortgage Application
✔ Start the process as early as possible.
✔ Work with a mortgage broker specializing in foreign buyers.
✔ Consider opening an Israeli bank account before applying for a mortgage.
Banks Offering Mortgages to Foreign Buyers
✔ Major Israeli banks have dedicated departments for foreign clients, but not all branches offer these services. It is advisable to check availability in advance.
Common Challenges and Solutions
✔ Difficulty proving income → Providing proof of assets or making a larger down payment can help.
✔ Restrictions on international money transfers → Plan your transactions in advance.
✔ Language barriers → Use professional translation services if needed.
✔ Time zone differences → Schedule online meetings in advance to coordinate with Israeli institutions.
✔ Remote signing → A notarized power of attorney may be required.
Additional Services to Consider
🔹 A real estate lawyer specializing in purchases by foreign buyers (especially for second-hand properties).
🔹 An international money transfer service to reduce currency exchange fees.
🔹 Property insurance to protect against fire, water damage, and natural disasters.
Naor Zeitouni is the founder and CEO of Creditly Technologies, a fintech company specializing in mortgage solutions, risk assessment, and innovative banking technologies.
Using advanced technology, Creditly compares mortgage offers to find the most favorable financing solution for each client.
The company collaborates with leading real estate developers in Israel and assists foreign buyers in securing mortgages.
📢 Click the banner and leave your details for a Creditly representative to contact you.
