It’s been a long while coming, interest rates on mortgages have finally started raising from their historic lows. This was bound to happen at some point in time. Surprisingly it came with sharp increases rather than the typical gradual increments that we are accustomed to seeing in interest rates. There is a very common misconception that the Bank of Israel official monetary policy directly impacts mortgage rates. They don’t. Bank of Israel rates have been unchanged and remain at the historic low of 0.1% as of this writing. This immediately affects only the prime rate (BoI rate + 1.5%) and quite closely the Makam rates (short-term bond index). All of the other rates are determined by supply and demand and the cost to the banks of lending. To keep...
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