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Temporarily Reduced Mortgage Monthly Payments

In order to make it easier to deal with the COVID-19 crisis, You can apply for mortgage relief, which will temporarily reduce your mortgage payments for a number of months chosen by you, without incurring a fee

In addition, your mortgage term can be extended by the same number of months for which you make reduced payments.


We offer several options to suit your needs:

1. If you have had a payment deferral applied to your loans for several months and this application would replace the current payment deferral, and/or your household income has decreased by at least 40% due to the COVID-19 crisis, and/or your net household income did not exceed NIS 20,000 (as of February 28, 2020) – you have the option to pay 75%, 50%, or 25% of the full monthly amount for 1-24 months, according to your preference.

2. If you do not meet one or more of the 3 conditions listed in section 1 above, you have the option to pay 50% or 75% of the full monthly amount for 1-24 months, according to your preference.

 


The reduced payments shall apply to all loans held by the same composition of borrowers specified in the application.
Once you submit your application, you will receive a response via text message (SMS).
Before submitting your application, we recommend that you read the information and explanations provided below, and that you review the costs that will result from submitting the application:
1. Cost of reduced mortgage payments, according to the amortization schedule (Spitzer Table) – with an extension of the mortgage term

2. Cost of reduced mortgage payments, according to the amortization schedule (Spitzer Table) – without an extension of the mortgage term

 

Apply for Mortgage Relief 

In any event, it is hereby emphasized that, until the bank announces a change in the payment amounts, with/without an extension of the mortgage term, and including the date upon which the reduced payment period shall commence, all mortgage payments shall be collected as normal.

Upon the conclusion of the reduced payment period, the mortgage payments shall be rearranged in line with the balance of the original/extended mortgage term, in accordance with your choice, and their amount shall be determined accordingly.

 


 Frequently Asked questions

Will my monthly payments increase after the reduced payment period? By how much?

1. If you have chosen reduced payments without an extended mortgage term: Yes, your monthly payments will increase between the end of the reduced payment period and the original end date of your mortgage. This increase is due to several factors. Firstly, unpaid interest, assuming it has not been paid, is added as compound interest. Furthermore, the total balance of your mortgage at the end of the reduced payment period will be spread over the remaining original mortgage period.

2. If you have chosen reduced payments with an extended mortgage term: Yes, your monthly payments will increase between the end of the reduced payment period and the new end date of your mortgage, following the extension of the mortgage term. However, they will increase by a lesser amount than when reducing payments without extending the mortgage term. The increase is due to several factors. Firstly, unpaid interest, assuming it has not been paid, is added as compound interest. Furthermore, the total balance of your mortgage at the end of the original mortgage term will be spread over a longer period than was originally intended, due to the extension, so the individual payments are smaller than they would be without such an extension.


What is compound interest?
Your monthly payments include payment for part of the loan principal as well as the interest on the mortgage balance that has not yet been repaid to the bank. The interest is the amount that you pay to the bank in exchange for the right to hold the mortgage funds with the bank.
During the period in which you make reduced mortgage payments, you may not have paid the mortgage principal or part thereof, or the monthly interest or part thereof (on the balance of the principal that has not yet been repaid to the bank). As a result, interest is charged during this period on both the unpaid interest and the unpaid principal (insofar as they have not been paid).
After the conclusion of the reduced mortgage payment period, mortgage payments shall consist of the principal amount + interest + interest on the unpaid interest, if not paid.


Will I be able to defer or reduce my mortgage payments in the future?
Any future application submitted to the bank shall be examined on an individual basis and a specific decision shall be made in regard to it.




Legal Notice

If you have opted for a temporary alteration in the payment amounts without extending the mortgage term (i.e., the mortgage term shall remain as defined in the original contract), the legal conditions for approval are as follows:
We, the undersigned, request that you alter the payment schedule for all our loans (in which the composition of borrowers is the same) and declare that we acknowledge the following:
1. The approval of the application by the Bank shall be subject to the directives of any (relevant?) law, the directives of the Bank of Israel, and the criteria relevant at the Bank when making your decision, as well as to our statement (to be given later in the process) regarding compliance / non-compliance with the 3 conditions in the context of previously receiving payment deferrals since the outbreak of the COVID-19 crisis, our income, and its reduction due to the COVID-19 crisis. We acknowledge that, if it transpires that our following statement is incorrect, the Bank shall be entitled to render the change in the payment schedule null and void. 
2. Regarding a loan that was in arrears prior to 28.2.2020, a temporary reduction in payment amounts shall only be possible for a period not exceeding 180 days from the date upon which the arrears commenced.
3. A temporary reduction in payment amounts shall not be possible for a partial/full balloon loan, for loans wherein the number of months remaining until their final repayment date is lower than the requested payment reduction period, and for loans that are currently involved in legal proceedings.
4. In the event that the request for a temporary reduction in payment amounts is approved by you, we acknowledge that:
The rate to be paid from the monthly billing amount shall be calculated according to the amortization schedule (Spitzer Table – equal monthly payments), even if the payment schedule for the loan is different, for the balance of the loan term and in accordance with the interest rate known for the loan at the time of the reduction. Linkage / exchange rate differences shall be added to this charge in accordance with statements made in the loan agreement (hereinafter – “the Temporary Reduction”).
If our loan contains portions to which a variable interest rate applies, then, insofar as there is a change in the interest of one or more of these loan portions, such an interest rate change shall not result in a change in the monthly payment (principal and/or interest) during the Temporary Reduction period, and payment for it shall be included in the payments made after the Temporary Reduction period.
Upon the conclusion of the Temporary Reduction period, the loan repayment method (full monthly payment / partial grace / full grace, etc.) for the remaining months shall be in accordance with the current payment schedule (prior to the reduction), however, the monthly payment amount shall be recalculated and shall be affected by a supplement for unmade payments (principal and/or interest) as well as a supplement for compound interest on unpaid interest, if not paid during the Temporary Reduction period, and the balance of each portion of the loan. As a result, we shall have to pay increased monthly payments each month from the end of the Temporary Reduction period.
Our application shall result in a change to the current payment schedules for our loan for the Temporary Reduction period, including if, at our previous request, you have granted us a deferral of payments (full or partial), which has yet concluded at the start of the Temporary Reduction period currently being requested. As a result, no deferral of payments shall be applied, in full or in part, to our loan during this period, and payment shall made as requested in this application.
The Temporary Reduction in payment amounts may begin from payment 1/2021 and, in any event, until the Bank announces the approval of the Temporary Reduction and the date upon which such reduction shall take effect, the loan payments shall be charged in accordance with the existing payment schedule (as was in force prior to the requested reduction).
There shall be no change to the interest rate applied to any portion of the loan (subject to future interest rate adjustments, as specified under the loan agreement).
The full interest amount shall be charged on each portion of the loan, even during the Temporary Reduction period. Insofar as the reduced payment is lower than the full interest charge, any interest that is not paid shall accrue and also bear compound interest during the Temporary Reduction period.
This shall not alter the loan term, and the end date of the loan term, which was set at the time the loan was made, shall remain unchanged.
The Temporary Reduction shall not apply to ancillary loan fees, including but not limited to commissions and/or insurance premiums. Ancillary fees shall continue to be collected during the Temporary Reduction period, in addition to payments that have been affected by the reduction.
A copy of your notification regarding the approval, partial approval, or rejection of our above application shall also be sent to the loan guarantors, if any.
Alterations to the payment schedule do not incur a commission.
The Bank reserves the right to cease/update the conditions for reducing payment amounts at any time prior to the point at which the Bank actually approves the Temporary Reduction.
5. Our application is submitted with the consent of all borrowers attached to the loans.


If you have opted for a temporary alteration in the payment amounts with an extension of the mortgage term (for the same period of time as the temporary reduction in payment amounts), the legal conditions for approval are as follows:
We, the undersigned, request that you alter the payment schedule for all our loans (in which the composition of borrowers is the same) and declare that we acknowledge the following:
1. The approval of the application by the Bank shall be subject to the directives of any (relevant) law, the directives of the Bank of Israel, and the criteria relevant at the Bank when making your decision, as well as to our statement (to be given later in the process) regarding compliance / non-compliance with 3 conditions in the context of previously receiving payment deferrals since the outbreak of the COVID-19 crisis, our income, and its reduction due to the COVID-19 crisis. We acknowledge that, if it transpires that our following statement is incorrect, the Bank shall be entitled to render the change in the payment schedule null and void. 
2. Regarding a loan that was in arrears prior to 28.2.2020, a temporary reduction in payment amounts shall only be possible for a period not exceeding 180 days from the date upon which the arrears commenced.
3. A temporary reduction in payment amounts shall not be possible for a partial/full balloon loan and for loans that are currently involved in legal proceedings. Furthermore, no alteration may be made to the payment schedule insofar as the loan term, following the requested extension, exceeds 30 years (or exceeds the original loan term, insofar as that is greater than 30 years).
4. In the event that the request for a temporary reduction in payment amounts is approved by you, we acknowledge that:
The rate to be paid from the monthly billing amount shall be calculated according to the amortization schedule (Spitzer Table – equal monthly payments), even if the payment schedule for the loan is different, for the balance of the original loan term (prior to the extension) and in accordance with the interest rate known for the loan at the time of the reduction. Linkage / exchange rate differences shall be added to this charge in accordance with statements made in the loan agreement (hereinafter – “the Temporary Reduction”).
We recognize that if our loan contains portions to which a variable interest rate applies, then, insofar as there is a change in the interest of one or more of these loan portions, such an interest rate change shall not result in a change in the monthly payment (principal and/or interest) during the Temporary Reduction period, and payment for it shall be included in the payments made after the Temporary Reduction period.
Upon the conclusion of the Temporary Reduction period, the loan repayment method (full monthly payment / partial grace / full grace, etc.) for the remaining months (prior to the extension of the period) shall be in accordance with the current payment schedule (prior to the reduction). During the extension period, payments shall be made in the form of full monthly payments. The monthly payment amount shall be recalculated and shall be affected by a supplement for unmade payments (principal and/or interest) as well as a supplement for compound interest on unpaid interest, if not paid during the Temporary Reduction period, and the balance of each portion of the loan after its extension, as requested by us. As a result, we shall have to pay increased monthly payments each month.
Our application shall result in a change to the current payment schedules for our loan for the Temporary Reduction period, including if, at our previous request, you have granted us a deferral of payments (full or partial), which has yet concluded at the start of the Temporary Reduction period currently being requested. As a result, no deferral of payments shall be applied, in full or in part, to our loan during this period, and payment shall made as requested in this application.
The Temporary Reduction in payment amounts may begin from payment 1/2021 and, in any event, until the Bank announces the approval of the Temporary Reduction and the date upon which such reduction shall take effect, the loan payments shall be charged in accordance with the existing payment schedule (as was in force prior to the requested reduction).
The full interest amount shall be charged on each portion of the loan, even during the Temporary Reduction period, at the same interest rate previously applied to each portion (subject to future interest rate adjustments, as specified under the loan agreement), and any interest that is not paid shall accrue and also bear compound interest during the Temporary Reduction period. To the extent that the interest on any given portion is determined by the mechanism set forth in the loan agreement (variable interest rate), the mechanism for determining the interest rate shall also apply during the extension period.
The end date of each portion of the loan may be different, and is derived from the end date of the portion as it applied prior to the change.
To the extent that we do not supply a life insurance policy (or policies) and/or a property insurance policy that shall also be valid for the extension period, and for which the Bank shall be defined as an irrevocable beneficiary, in accordance with the provisions of the loan agreement, no life insurance and/or property insurance shall be valid for this period. Therefore, in the event of the death of any of the borrowers, or of damage occurring to the property, there shall be no appropriate insurance coverage.
In light of the above, insofar as I have purchased a life insurance policy (or policies) after 1/10/2005 through Tefahot Insurance Agency, I hereby request to adjust the insurance period in the policy (policies) I purchased to reflect the updated loan term, subject to the age of the insured, as defined in the policy terms and conditions, which may not exceed 80 years at the end of the insurance period in the life insurance policy.
I agree that the additional insurance period shall be paid in accordance with the premium. The premium shall be determined in accordance with personal details and the pricelists of the insurance company. I am also aware that, insofar as there is a Temporary Reduction in the payment amounts, I shall continue to be charged the insurance fees under the life insurance policy (policies). 
Insofar as I have purchased a property insurance policy after 1/10/2005 through Tefahot Insurance Agency, I consent to the continuation of the automatic renewal of such a policy until the end of the loan term following its extension. I am aware that the additional insurance period shall be paid in accordance with the premium, in line with the insurance amount and the mortgage insurance rate, as approved by the Capital Market, Insurance and Savings Authority.
The extension of the loan term may affect the early repayment fee, in terms of both its existence and its amount, in the event that the borrower/s choose to repay the loan in whole or in part through early repayment. At this time, it is not possible to know what, if any, the future effect shall be on the early repayment fee, and it shall be calculated in accordance with the provisions of the Banking (Early Repayment Fees) Order, 5762-2002, or any replacement that may supersede it.
The Temporary Reduction shall not apply to ancillary loan fees, including but not limited to commissions and/or insurance premiums. Ancillary fees shall continue to be collected during the Temporary Reduction period, in addition to payments that have been affected by the reduction.
A copy of your notification regarding the approval, partial approval, or rejection of our above application shall also be sent to the loan guarantors, if any.
Alterations to the payment schedule do not incur a commission.
The Bank reserves the right to cease/update the conditions for reducing payment amounts at any time prior to the point at which the Bank actually approves the Temporary Reduction.
5. Our application is submitted with the consent of all borrowers attached to the loans.