If you’re a Canadian looking to buy in Israel — whether as an oleh, an investor, or a future retiree — one of the biggest surprises you’ll run into is how different the mortgage process is here compared to back home.
Here’s what you need to know before diving in.
1: Down Payments Are Higher in Israel
In Canada: In Canada, if you’re buying a primary residence under $500,000, you can put as little as 5% down. For homes priced between $500,000 and $999,999, you’ll need 5% on the first $500,000 and 10% on the remainder. For properties priced over $1 million, 20% down is required.
That said, the maximum property value for an insured mortgage is now $1.5 million. So you can potentially buy a home up to that amount with less than 20% down, as long as you meet the insurer’s guidelines. That includes having a minimum credit score of 600 and using the property as your primary residence.
For a primary residence, you can buy a home up to $1.5 million and put down less than 20%, as long as you get mortgage insurance (e.g., CMHC insurance).
In Israel: The minimum down payment for a primary residence is 25%, and for a second home or investment property, you’re looking at 50% down — minimum. Canadians wanting to invest in property in Israel will need a minimum down payment of 50%.
Add to that purchase taxes (Mas Rechisha), legal fees, agent fees, and bank fees — and your total cash outlay will be higher.
2: Mortgage Terms Are Structured Differently
In Canada: Loans are usually single-track loans. Both fixed as well as variable rate mortgages are available. Amortization is typically 25 to 30 years, with shorter fixed-rate terms (like 1 to 10 years) layered within.
In Israel: Loans are typically structured with multiple “tracks” (מסלולים). Each track has its own interest rate, repayment terms, and indexing — you might have:
• A fixed rate shekel track
• An adjustable rate (ARM) shekel track
• A track linked to the prime rate
• A track linked to the cost of living index
• A track in USD or CAD (for foreign income)
These tracks are blended into a single mortgage, which makes Israeli mortgages more complex but potentially more flexible.
3: Contingencies
In Canada: In Canada, conditional agreements within a purchase contract are a well-established part of the real estate process. Buyers often include financing conditions in their offers to protect themselves in case they cannot secure a mortgage. Contingencies might include the sale of the buyer’s home or the outcome of the appraisal and inspection of the property.
In Israel: In Israel, purchase contracts do not generally include conditional agreements. Therefore, buyers are expected to take on more financial responsibility early in the transaction. It is therefore advisable to obtain a mortgage pre-approval before signing a purchase contract.
4: Mortgage Brokers: Very Different Roles
In Canada: Mortgage brokers are often independent and get paid by the bank. They present you with the best rates from a range of lenders.
In Israel: Mortgage brokers work directly for the client. Also, since the Israeli mortgage system allows for negotiable rates, terms, advocacy makes a big difference.
5: Timelines & Bureaucracy
In Canada: It’s usually a streamlined digital process. You sign some forms, upload your docs, and off you go.
In Israel: Welcome to the land of paperwork. You’ll need hard copies, original signatures, stamped approvals, and occasional visits to the bank in person. Patience (and a printer) will be your best friends.
So… What’s Better?
It’s not about better or worse — it’s about knowing the system. Buying property in Israel comes with its own rules, expectations, and culture. But with the right guidance and preparation, Canadians can absolutely succeed here.
Thinking of buying in Israel?
Let’s talk strategy — and start translating your Canadian advantage into Israeli keys.
Gershon Sheffield
+972-52-6050004 (Cell+WhatsApp)
(732) 813-1593 (US)
Email: gershon@mortgageisrael.com