BoI to force banks to be more competitive in mortgages

The Bank of Israel will seek to end the public’s inability to compare offers from different banks for the mortgages they seek. A source close to the matter told Globus that the Bank of Israel will soon publish new instructions that will help mortgage providers make informed decisions regarding the best mortgage offers that suit their economic conditions. The new instructions contain a number of far-reaching changes, which the Bank of Israel hopes will create a system of real comparisons between the various mortgages offered by different banks. Related Articles All-time Standard Mortgages Acquired in Israel In June As part of a planned reform, the Bank of Israel, headed by Governor Professor Amir Yaron, will require that banks establish a digital system that allows mortgage underwriters to receive initial offers from several banks , so that they can get a general picture before actually going to any bank branch. Another measure that the Bank of Israel is promoting as part of the reform is the creation of a number of core unified tracks that will be identical and divided in the same way. Currently, the rate of mortgages is based on splitting the loan between initial interest, linked interest, and variable fixed interest. The banks set different spreads for the different paths in the mortgage and the Bank of Israel is now requiring the banks to create three or four comparable paths. Additionally, since mortgages are long-term, and can span over 30 years, the Bank of Israel will require banks to provide customer accounts that will let them know in advance how much they can expect to pay back each month throughout the mortgage lifecycle and exactly what they are paying for. The Bank of Israel is currently working on the new instructions, which are being formed due to the sharp rise in mortgage loans, which reached a record level of NIS 11.6 billion last month. At the same time, research published by the Israel Competition Authority in January found that the Israeli public does not compare different mortgages offered by banks before applying for a mortgage. The Bank of Israel said, “We cannot respond to the measures mentioned in the article. As the Governor of the Bank of Israel and the Superintendent of Banks said in the past, the Bank of Israel is studying a number of measures to increase transparency and competition in the mortgage market and simplify access for the benefit of customers. If and when these measures come to fruition. fruition, the Bank of Israel will inform the public in an orderly manner.” Published by Globes, Israel business news – en.globes.co.il – 12 July 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021