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Can a Non-Resident Get a Mortgage in Israel?

Q: Do I have to come to Israel to sign the mortgage?

Most banks require at least one signature in person, either in Israel or at an Israeli consulate. Some allow a notarised power of attorney for part of the process. Ask the specific bank before you book travel.

Q: Can I get a mortgage in dollars or euros?

A few banks offer foreign-currency tracks. The terms differ from shekel loans and the regulatory limits still apply, so compare carefully with your lawyer or a licensed mortgage adviser.

Q: Does an Israeli citizen living abroad get better terms?

Not automatically. Banks look at residency and income location, so a citizen living abroad is usually treated as a foreign borrower. Check with the bank for its own policy.

Mortgage application file for an apartment purchase in Israel

Yes. Israeli banks do give mortgages to foreign residents who buy property in Israel, and many purchases by buyers from the United States, France, the United Kingdom and elsewhere are financed this way. The difference is in the terms: the bank will usually finance a smaller share of the price than it would for an Israeli resident, it will ask for more documents, and the approval and signing process is slower because much of it happens through an Israeli lawyer with a power of attorney. This page explains what to expect so you can plan the purchase timeline and your own equity accordingly.

What the bank means by non-resident

For mortgage purposes the bank looks at where you live, where you earn your income and where you pay tax, not at your passport. A person who holds Israeli citizenship but lives and works abroad is normally treated as a foreign borrower, because the bank cannot easily verify income or enforce the loan against assets in Israel. A new immigrant who has already moved to Israel is treated differently again. Tell the bank your exact situation at the first meeting, since it decides which lending track and which internal rules apply.

How the financing ratio differs

The Bank of Israel Banking Supervision Department caps the loan-to-value ratio that banks may give on housing loans, and the cap depends on the purpose of the purchase: a sole home, a replacement home, or an additional (investment) property. A non-resident who already owns a home abroad is usually placed in the investment category, which carries the lowest cap. On top of the regulatory cap, each bank applies its own credit policy for foreign borrowers, which is often more conservative still. Do not rely on a figure you saw online; ask the bank for its current ratio for your profile, and check the Bank of Israel directive for the regulatory ceiling.

The bank also caps the share of your monthly income that repayments may take, and it limits how much of the loan may be at a variable interest rate. All of these limits are set in Banking Supervision directives and change from time to time, so check the current figures with the bank or with the Bank of Israel.

What the bank asks for

Expect to supply more than a local borrower would, and expect everything to be reviewed for anti-money-laundering purposes under the Prohibition on Money Laundering Law 5760-2000. A typical list includes:

Passport and, where relevant, a second identity document.
Proof of your home address abroad, such as a utility bill or bank statement.
Income documents: recent pay slips, employment letter, or for self-employed borrowers, business accounts and tax returns from your home country.
Tax returns or tax assessments from your country of residence for the last few years.
Bank statements showing the equity you will bring, and an explanation of where that money came from.
A credit report from your home country, if one exists there.
The signed purchase contract, or a draft of it, and the seller's title extract from the Land Registry.
An appraisal of the property by a valuer from the bank's approved list.
US citizens and US tax residents: a signed tax-residency form, because banks report under FATCA.

Documents in a language other than Hebrew or English usually need a translation, and some banks ask for notarised or apostilled copies. Ask the bank in writing which documents must be originals.

How the process runs from abroad

Pre-approval: before you sign a purchase contract, ask the bank for an in-principle approval based on your income and equity. It is not binding, but it tells you how much you can borrow.
Purchase contract: your Israeli lawyer negotiates and signs the contract, usually under a power of attorney signed by you at an Israeli consulate or before a notary with an apostille.
Appraisal: the bank orders a valuation of the specific apartment and lends against the lower of the price and the appraised value.
Final approval and loan documents: the bank issues the loan terms. You sign them in person in Israel, or at times through the power of attorney, depending on the bank's rules.
Security: the bank registers a mortgage on the apartment in the Land Registry under the Land Law 5729-1969, or a caveat and a pledge if the property is not yet registered in your name.
Insurance: before the money is released the bank requires structure insurance and, in most cases, life insurance assigned to it.
Drawdown: the bank pays the seller directly, in shekels, according to the payment schedule in the contract.

Repaying from abroad

The loan is in shekels unless the bank offers a foreign-currency track, and repayments are collected by standing order from an Israeli bank account. That means you will need an Israeli account and a plan for moving money into it on a regular basis. Your salary is in another currency, so the real cost of the loan to you moves with the exchange rate; this is the main financial risk of a foreign-funded mortgage and it deserves its own planning.

Common mistakes

Signing a purchase contract before getting an in-principle approval, then discovering the bank will finance less than expected.
Assuming the maximum ratio seen in an advertisement applies to a foreign resident.
Arriving with untranslated or unapostilled documents and losing weeks to paperwork.
Forgetting that purchase tax, lawyer's fees, broker's fee and appraisal costs must come from your own funds, not the loan.
Not leaving time for the bank's compliance review of the source of your equity.

FAQ

Do I have to come to Israel to sign the mortgage?