Archives for February, 2009


Your Mortgage, the lower prime rate and the return of the dollar

The prime rate was lowered to 2.25% (the prime is always 1.5% higher than the official Bank of Israel rate, currently at 0.75%). There isn’t a lot of downward movement on that. I want to emphasize that the prime rate can go up. It will go up. I can’t tell you when it will go up, but it will definetly go up. I can’t tell you how much it will go up, but up it will go. Other things can go up and down also. For instance, the dollar is right now at 4.17. When was the last time you heard about anyone taking our a dollar linked mortgage? In many cases, the time will come soon. Do you remember when the exchange rate...
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israeli mortgage

Prime Rate mortgages and the interest trap

I haven’t had a chance to write one of my especially erudite passages lately. Business has been good. Thanks to those patient people waiting for my pieces of wisdom. So what’s happened? Inflation is negative, the dollar is up, and there is speculation that the interest rate might be lowered from the 1% threshold. What to do what to do what to do? Primarily I’m concerned with the prime. We explain to our clients that prime mortgage rates can go up as quickly as they’ve gone down. When we plan out mortgages, we take into account the historic averages in addition to today’s rates. I have no idea when inflation will hit, but it will hit strong when it does. All of the governments...
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Modi’in to go up in price

The tastefully name Ariel Rosenberg writes in Globes that real estate prices in Modi’in are about to jump thanks to the new road. By chance I drove on that highway today, and I can’t really see it, but I’m an expert on debt, not real estate values. In any case, this is probably bad news for those looking to buy in Modiin, which has been the last bastion of sanity in our crazy real estate market. Every case is different, and you should always consult your qualified Israeli Mortgage Expert....
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bank of israel

Trying to make the Prime rate long term

I really can’t tell you if they will succeed or not. But according to this article in globesבנק ישראל יתחיל לרכוש אגרות חוב the Bank of Israel is preparing to purchase government bonds. If they buy enough of them, the theory is that this will make the bond rate the defacto interbank rate. Right now the interbank rate is volatile and can change any time. If it gets backed by 10-year bonds we will see a much more stable rate. My guess is that this will be good in the long run, but in the short run will make prime rate loans more expensive for new loans....
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