The Bank of Israel lowered the Interest Rate today another 0.25% to 2% (thereby making the Prime rate 3.5%). The Bank also further restricted the LTV ratios allowed for mortgages in order to discourage people taking cheap mortgages to buy investment properties. First time Israeli buyers will only be allowed up to 75%, Israelis upgrading their property who undertake to sell their sole existing property within 24 months can get up to 70% and other investors or any foreign buyers will be limited to 50% of the investment property.
Buyers will have to file an affidavit with the bank declaring the property to be their sole apartment or an upgrade apartment together with a copy of the tax filings. These restrictions will apply to any mortgage approved from the 1st of November 2012 onwards.
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