Mortgages for Non-Residents and Olim

Directive 329 as it stands in 2026

The directive was last updated on 30 June 2026 (circular 2852, version 13). Its core ceilings have not changed in years. What changed in 2025 and 2026 is how much banks may lend on developer-subsidised loans and how they count debt already secured on a property.

Two changes take effect on 1 October 2026 under circular 2840 of 8 February 2026, whose start was postponed from 1 July by circular 2852. Repayments on every loan already secured on the same property count toward the 50 percent repayment-to-income limit, and at the same bank the two-thirds cap on variable-rate borrowing is measured on all credit secured on that property.

What 50 percent means at Sde Dov prices

At 50 percent a foreign buyer funds half the price in cash, plus purchase tax, which the bank does not finance, plus legal and bank costs. On the FIRST three-room apartment listed at about ₪6.8M that is ₪3.4M of equity and about ₪558,899 of purchase tax before any fees. An Israeli citizen buying the same apartment as a sole home could borrow up to ₪5.1M, and as an oleh would pay about ₪79,976 in purchase tax.

The loan must also pass the repayment test. A ₪3.4M loan over 30 years at an illustrative 5 percent a year costs about ₪18,252 a month, so the bank would need to see documented net disposable income of at least about ₪36,504 a month to stay under the 50 percent cap, and more to stay under 40 percent.

What Israeli banks ask of a non-resident borrower

Directive 329 sets the ceilings; each bank sets its own policy on whom it lends to and how it counts foreign income, and that policy changes more often than the directive. Expect to document identity and income from every country where you earn: recent payslips or employer letters, tax returns filed abroad, bank statements showing the income arriving, a credit report from your home country and a statement of your assets. Documents in other languages usually need translation and sometimes notarisation.

The directive counts only income that is paid regularly, backed by documents, and seen arriving in an account. That is why bonuses, equity compensation and self-employment income take longer to underwrite than a salary.

Start with an approval in principle (אישור עקרוני, ishur ekroni). Under Bank of Israel Directive 451 a bank must answer a mortgage request within five business days and hold the rate it quotes for at least 24 days from the approval. The bank then sends its own appraiser, and it will not release money on an off-plan purchase until the Sales Law security for your payment is in place.

Foreign-currency and index-linked tracks

Most loans are split into tracks (מסלולים, maslulim): fixed or variable, linked to the consumer price index or not. The Bank of Israel cut its rate to 3.25 percent on 1 September 2026, the third cut in a row, which puts the prime rate at 4.75 percent; the next decision is due on 21 October 2026. Prime-based tracks move with each decision; fixed-rate tracks do not.

A buyer paid in dollars or euros can ask for a track linked to a foreign currency. Directive 329 lets a bank leave foreign-currency and currency-linked housing loans to non-residents outside the two-thirds cap on variable-rate borrowing, provided its overall book stays within the cap, so such a loan can be mostly or wholly variable. That reduces the mismatch between your income and your repayments. The price and the payments to the developer stay in shekels, so a currency move between signing and delivery still changes what your equity costs, and on a Sde Dov schedule that period can run for years.

Olim

An oleh who holds Israeli citizenship is on the citizen side of Directive 329, so a sole apartment falls in the 75 percent category and a replacement apartment in the 70 percent one. A buyer who signs before aliyah is still a foreign citizen at signing. Because an off-plan mortgage is often approved and drawn years later, ask the bank in writing how it will classify you at the time the loan is approved and executed.

Olim with a valid oleh certificate who do not own an apartment can also get a state-assisted eligibility loan (משכנתא לזכאים, mashkanta le-zaka'im) through the banks for up to 15 years from aliyah. The amount is set by a points score. Nefesh B'Nefesh puts the typical amount between ₪100,000 and ₪200,000 and the maximum around ₪300,000, and says that for most olim it does not meaningfully raise the 75 percent ceiling. The Knesset Research and Information Center describes the loan as CPI-linked at a fixed rate set at the lowest of three: the Bank of Israel's published average mortgage rate less 0.5 percentage point, the lending bank's own rate, or 3 percent. On a Sde Dov price it is a small slice of the loan.

Income tax can matter more for affordability. Olim and veteran returning residents who arrived between 5 November 2025 and 31 December 2026 are exempt on Israeli employment and business income up to ₪600,000 in 2026 (prorated for the part of the year as a resident), ₪1M in each of 2027 and 2028, ₪350,000 in 2029 and ₪150,000 in 2030. Higher net income improves the repayment ratio the bank tests.

How the mortgage meets an off-plan payment schedule

On a new-build contract you do not borrow the whole price on day one. You pay the developer in instalments set by the contract, often a small share at signing and a large balance near delivery. The mortgage is approved as a total and released in stages, each draw paid straight into the project's account at the accompanying bank against the voucher (שובר, shovar) for that instalment. Under section 3C of the Sale (Apartments) (Assurance of Investments) Law 1974, a lender to a buyer must tell the buyer in writing about the law's protections and must make sure the security for the payment is in place before it transfers the money.

Three practical points. The approval in principle holds a rate for at least 24 days; on a loan drawn in stages over years, ask in writing how each later draw will be priced and whether the approval can be extended if construction slows. The bank values the apartment at the lower of the contract price and the appraisal, so a discount structure or a low appraisal can raise the cash you need. And up to 40 percent of the price can rise with the construction inputs index until the contractual delivery date; ask whether the approval covers those linkage differences or whether they come from your own money.

Developer schemes that defer most of the price to delivery (10/90, 20/80) change when cash leaves your account; the loan ceiling at the end stays the same. Since March 2025 the Bank of Israel has limited bullet and balloon loans on which the developer pays the interest to 10 percent of each bank's quarterly mortgage lending, and has required banks to hold more capital against projects with many deferred-payment sales, under a temporary order in force until 31 December 2026. Bizportal reported in June 2026 that financing offers at Sde Dov are worth a hidden 6 to 8 percent off the listed price.

Where each of these comes from

Bank of Israel, Directive 329 on housing-loan limits, version 13 (circular 2852): definitions of sole dwelling, investment dwelling and non-resident, LTV, repayment-to-income, variable rate, term, contractor-subsidised loans, foreign-currency loans to non-residents: https://www.boi.org.il/media/hjrlkrse/h2852.pdf (30 June 2026)

Bank of Israel, circular 2840 amending Directive 329: repayments on all loans secured on the same property: https://www.boi.org.il/media/ptciib1v/h2840.pdf (8 February 2026)

Bank of Israel, questions and answers on Directive 329: value is the lower of the appraisal and the contract cost: https://www.boi.org.il/media/unid5est/329_10andqa.pdf (checked 28 September 2026)

Bank of Israel, Directive 451 on housing-loan procedures: answer within five business days, rate held at least 24 days: https://www.boi.org.il/media/utld2tgp/451.pdf (version 22, July 2023)

Bank of Israel press release, limits on deferred-payment sales and bullet and balloon loans until the end of 2026: https://www.boi.org.il/publications/pressreleases/23-3-25 (23 March 2025)

Bank of Israel home page: policy rate 3.25 percent, next decision 21 October 2026: https://www.boi.org.il (checked 28 September 2026)

Bizportal, third consecutive cut to 3.25 percent: https://www.bizportal.co.il/general/news/article/20040979 (1 September 2026)

Sale (Apartments) (Assurance of Investments) Law 1974 on Nevo, section 3C: duties of a bank lending to a buyer: https://www.nevo.co.il/law_html/law00/70330.htm (checked 28 September 2026)

Finance Family (mortgage advisers), documents banks request from non-residents and foreign-currency tracks: https://finance-family.co.il/%D7%9E%D7%A9%D7%9B%D7%A0%D7%AA%D7%90-%D7%9C%D7%AA%D7%95%D7%A9%D7%91%D7%99-%D7%97%D7%95%D7%A5 (checked 28 September 2026)

Kol Zchut, mortgage assistance for olim for 15 years from aliyah: https://www.kolzchut.org.il/he/%D7%A1%D7%99%D7%95%D7%A2_%D7%91%D7%A8%D7%9B%D7%99%D7%A9%D7%AA_%D7%93%D7%99%D7%A8%D7%94_(%D7%9E%D7%A9%D7%9B%D7%A0%D7%AA%D7%90)_%D7%9C%D7%A2%D7%95%D7%9C%D7%99%D7%9D (checked 28 September 2026)

Nefesh B'Nefesh, mortgage benefits for olim: typical and maximum amounts: https://www.nbn.org.il/life-in-israel/community-and-housing/buying-and-renting/mortgage-benefits-in-israel (checked 28 September 2026)

Knesset Research and Information Center, review of eligibility loans: rate formula and terms: https://fs.knesset.gov.il/globaldocs/MMM/6f5797aa-638b-ed11-8151-005056aac6c3/2_6f5797aa-638b-ed11-8151-005056aac6c3_11_20023.pdf (2023)

gov.il, income-tax guide for olim: the 2026 to 2030 exemption and its ceilings: https://www.gov.il/he/pages/immigrant-guide-1?chapterIndex=5 (checked 28 September 2026)

Bizportal, hidden financing discounts of 6 to 8 percent at Sde Dov: https://www.bizportal.co.il/realestates/news/article/20033505 (6 June 2026)

Ynet (Calcalist), FIRST three-room apartment listed at about ₪6.8M: https://www.ynet.co.il/economy/article/r1auftaq11l (28 December 2025)

Nadlan Center, SEVEN SEAS average about ₪8.7M per home: https://www.nadlancenter.co.il/article/14205 (25 March 2026)

Zirat HaNadlan, DIMRI YAMA two-room apartments from ₪3.75M: https://zirat-nadlan.co.il/articles/%D7%A4%D7%A8%D7%95%D7%99%D7%A7%D7%98-dimri-yama-%D7%A9%D7%93%D7%94-%D7%93%D7%91-%D7%99%D7%95%D7%A6%D7%90-%D7%9C%D7%A9%D7%99%D7%95%D7%95%D7%A7-%D7%93%D7%99%D7%A8%D7%95%D7%AA-2-%D7%97%D7%93%D7%A8 (22 December 2025)