The Ministry of Construction and the Banking Supervision Department announce an extension of the deadline for refinancing mortgages for eligible borrowers

Following a decision by the Ministry of Construction and the Banking Supervision Department, the deadline for refinancing mortgage loans to eligible borrowers has been extended by three months to August 31, 2015.

On December 20, 2014, the Ministry of Construction, together with the Bank of Israel, announced a process to encourage the early repayment, or refinancing, of State mortgage loans to eligible borrowers. These loans were granted at higher interest rates than what is currently available in the mortgage market. As per this process, borrowers who took out such mortgages are permitted to repay the loan, or to refinance it, in a rapid process, according to the conditions set out, with the only fee being a fee for changing the terms of the loan, which will not exceed NIS 120.

In view of the importance of this process, which is intended to make it easier for borrowers to meet their obligations, it has been decided to extend the deadline for refinancing mortgage loans to eligible borrowers in a rapid track at low cost, to August 31, 2015.

In addition to the benefits of the process, the Capital Markets, Insurance and Savings Department at the Ministry of Finance published a circular stating that the insurance company that administers the life insurance policy purchased together with the mortgage loan shall make it possible for a borrower wishing to refinance the mortgage to continue the existing insurance coverage under the same terms without requiring medical underwriting.

The Ministry of Construction and the Bank of Israel call on the public to visit the websites of the Bank of Israel and the Ministry of Construction, to obtain information, and to make a simple examination of the worthwhileness of refinancing.  Many borrowers may discover that the refinancing being offered could lead to savings of tens of shekels per month in mortgage payments, and thousands of shekels over the life of the mortgage. Every month that passes results in loss.  The terms of the process, as well as the change made regarding the insurance coverage, currently make the process even more worthwhile.