The Bank of Israel has accused the country’s banks of not cutting mortgage rates in the way that it had hoped following the cancellation of the restrictions on the variable interest rate linked to the prime rate, which came into effect two weeks ago. In an announcement directed towards the banks, the Bank of Israel said that mortgage rates should be revised and changed.
The statement said, “The Bank of Israel is closely following developments in the mortgage market following the instructions releasing restrictions on prime rate that came into effect two weeks ago. Initial indications from the field, which have been given to the bank, as part of routine monitoring, show that the cancelation of the restriction has not been passed on in sufficient amounts so far, to benefit consumers.”
Ceiling raised on variable rate mortgage component
The Bank of Israel added, “The Bank continues to monitor developments in the market and follow the degree to which it is passed on to the public. As part of discussions conducted at the bank on the issue last week, the Governor of the Bank of Israel Prof. Amir Yaron instructed the bank’s professional team, led by the Supervisor of Banks, to examine and to form relevant policy measures, in the event that a sufficient amount of prime rate restrictions are not passed on by the banks to the benefit of mortgage takers.”
Published by Globes, Israel business news – en.globes.co.il – on February 2, 2021
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