Surprising differences between buying a home in Israel vs. US

In Short: What You Need to Know

Lower Loan-to-Value (LTV): Foreign buyers in Israel are usually capped at 50% financing, unlike the 80%+ common in the US—though workarounds exist.
Age Restrictions: Israeli banks limit mortgage terms based on age, while US laws prohibit such discrimination. Solutions include co-signers or reverse mortgages.
Flexible Market: In Israel, nearly everything is negotiable, including mortgage terms, whereas US lending tends to be more rigid.
Complex Process: Navigating Israeli mortgages requires local expertise and persistence to secure the best deal.
A Mortgage Broker is Essential: Working with someone who understands the Israeli system can unlock better financing options.

If you’re considering a property purchase in Israel, it’s crucial to understand that the mortgages here are distinctively different from what you’re used to in the US. Here are some key differences that might surprise you:

LTV:

In Israel: foreign buyers are usually limited to 50% mortgage. This is irrespective of their income, status or other factors. That said, there are many workarounds that will enable you to put down less than a 50% downpayment.
In the US: conventional loans are usually up to 80% with various cases of way more than that. LTV greatly affects mortgages rates and mortgage insurance requirements.

Age:

In the US: Fair housing act makes it illegal to discriminate based on age.
In Israel: Age is a factor. Mortgage bank will limit the mortgage duration based on age, and even deny an application. That said, younger co-signers, or a reverse mortgage can solve this constraints.
Market mentality:
In the US: Usually the attitude is WYSIWG (what you see is what you get). You can negotiate, but usually negotiations are pretty limited.
In Israel: Everything is up for discussion. Either by negotiation
and convincing a bank to be more flexible, or by finding other solutions.
These differences, among many other differences are the reason it’s so important to work with a mortgage broker that speaks fluent “Israeli” – someone who will not take a no for an answer, and who will be creative and
determined to get you the best offer.
Talk soon,
Be’eri
Your Israel Mortgage broker.

https://www.irec.co.il/en/free-consultation/