Borrowers who have already deferred the payments due to the COVID-19 crisis may receive an additional deferral until December 31, 2020.
Borrowers who have not yet deferred their mortgage payments due to the COVID-19 crisis, may apply for a payment deferral until December 31, 2020 and choose the desired deferral period, between 1-6 months.
The deferral will apply to all of the loans of the same composition of borrowers specified in the application. After the application is submitted, an answer will be delivered by sms.
We are doing our best to process customer applications as soon as possible. However, due to the large volume of applications, the applications will only be processed after the next debit date (unless otherwise notified).
In any event, it is emphasized that until the Bank gives notice of approval of the payment deferral, including the date of commencement of the deferral period, the loan payments will be collected as usual.
The deferred mortgage payments will be rescheduled over the remaining mortgage period, and the monthly repayments will increase accordingly.
Frequently Asked questions
Will the monthly repayment amount increase at the end of the deferral period and by what amount?
From the end of the mortgage payment deferral period until the date of repayment of your mortgage, the monthly payments will increase. The increase in the amount derives from several reasons:
The mortgage end date remains unchanged.
The outstanding amount accrues during the deferral period (and is now higher).
Compound interest on the interest that was not paid during the deferral period is added to the balance of the mortgage.
What does compound interest mean for the mortgage deferral period?
The monthly repayments include payment for part of the loan principal, as well as the interest on the outstanding mortgage balance. The interest is the amount that the borrower pays the mortgage provider in exchange for the right to hold a mortgage with the Bank.
In the period of full deferral of the mortgage payments, the borrower pays neither the mortgage principal nor the monthly interest (on the outstanding principal balance). During such period, unpaid interest also bears interest (similarly to the interest charged on the principal), hence its name “compound interest” – interest on the unpaid interest.
Mortgage repayments after the end of the deferral period consist of the principal amount + interest + interest on the unpaid interest.
Will we be able to defer more payments in the future?
Any application submitted to the Bank in the future for approval of payment deferral will be examined and decided on a case-by-case basis.
- The mortgage deferral is subject to the Bank’s discretion, the customer’s repayment capacity and the directives of the Bank of Israel.
- If the Bank approves the application, then from the end of the period of deferral/reduction of the payments, the loan will be debited on a monthly basis in increased payments until full repayment
- In the case of a full deferral, the increase in payments also derives from compound interest, on interest which is not paid during the deferral period
- With respect to loans that were in arrears before February 28, 2020, a deferral of up to 180 days from the beginning of the arrears will be allowed.
- Loans in legal proceedings do not qualify for deferral.