Over 11 Billion Shekels: Mortgage Loans in Israel Reach a New Record High

SadaNews - The mortgage market in "Israel" recorded exceptional performance in December 2025, with new loan volume reaching approximately 11.17 billion shekels, according to data published by the Bank of Israel, as translated by SadaNews.

This figure is the highest since December 2024, when loans at that time amounted to nearly 13.8 billion shekels.

This increase comes despite 2025 witnessing a relative decline in the number of real estate sales transactions, as new mortgage loans remained at high levels throughout the year, although they did not reach the level of December. July 2025 was the closest, with loan volume reaching approximately 10.68 billion shekels, as translated by SadaNews.

In December 2024, the sharp rise in loans was attributed to a decision to raise value-added tax from 17% to 18% at the beginning of 2025, prompting many to expedite their purchase transactions. However, in the most recent December, there does not appear to be a specific economic event that explains this surge, raising questions about the actual factors behind it.

The Role of the Bank of Israel and "Purpose Loans"

Alongside this activity, the Bank of Israel published a draft of new guidelines concerning the housing credit market in December, which included proposals related to what is known as "purpose loans," which are housing loans not necessarily used for purchasing a property.

The draft proposes to make a temporary exemption that has been in place since the beginning of this decade a permanent one, allowing the financing ratio to be raised from 50% to 70% of the property's value, provided that the portion between 50% and 70% does not exceed a cap of 200,000 shekels, according to the translation by SadaNews.

Data from December shows an unprecedented jump in the volume of these loans, reaching about 791 million shekels, the highest level recorded to date. During 2024, the volume of this type of loan ranged between 600 and 700 million shekels, with previous peaks recorded at 731 million shekels in March and 742 million shekels in December, before recently approaching the 800 million shekel threshold.

Observers expect this sector to see further developments in the coming months, especially if the new guidelines are officially approved, which may have accompanying effects on the credit and housing market.