Mortgage Insurance

What's required, types of mortgage insurance (life and structure), costs, price comparison, and savings tips.

Mortgage insurance (Bituach Mashkanta) is a requirement for anyone taking a mortgage in Israel. The bank mandates it to protect both the lender and the borrower's family in case of death, disability, or the property's destruction.

Types of Mortgage Insurance in Israel

There are two main components: life insurance (Bituach Chayim) that pays off the remaining mortgage if you pass away, protecting your family from losing the home, and property insurance (Bituach Mivne) that covers the physical structure against damage from fire, earthquake, floods, and other events. Both are typically required by Israeli banks as a condition of the mortgage.

How Much Does It Cost?

Mortgage life insurance premiums depend on your age, health status, loan amount, and loan term. Younger, healthier borrowers pay significantly less. Property insurance costs depend on the building's construction, location, and replacement value. Together, these typically add a few hundred shekels per month to your mortgage costs.

Shopping for Better Rates

Here is an important point many Israelis miss: you are not required to buy insurance from your mortgage bank. You can purchase mortgage insurance from any licensed insurance company in Israel. Shopping around can save 30-50% on premiums compared to the bank's default offer. Get at least three quotes before committing.

What to Watch For

Check the policy terms carefully. Some policies reduce coverage as you pay down the mortgage (declining balance coverage), which is standard. Understand exclusions — pre-existing medical conditions may affect coverage. Review the policy annually, especially if you refinance, as your coverage needs change as your mortgage balance decreases.

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The information on this page is for educational purposes. Please consult a professional before making financial decisions.

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Frequently asked

+−What types of insurance does my mortgage require?

Two main types: life insurance (Bituach Chayim) that pays off the mortgage if you pass away, and property insurance (Bituach Mivne) that covers the building against fire, earthquake, floods, and other damage.

+−Do I have to buy insurance from my mortgage bank?

No — you can purchase mortgage insurance from any licensed insurance company in Israel. Shopping around can save 30-50% on premiums compared to the bank's default offer. Always get at least three quotes.

+−How much does mortgage insurance cost?

Premiums depend on your age, health, loan amount, and loan term. Together, life and property insurance typically add a few hundred shekels per month. Younger, healthier borrowers pay significantly less.

+−What does property insurance (Bituach Mivne) cover?

Property insurance covers the building structure against fire, earthquake, floods, storms, and other damage. It does not cover contents — that requires a separate home contents policy (Bituach Tochein).

+−Can I change mortgage insurance providers mid-loan?

Yes, you can switch insurance providers at any time as long as the new policy meets the bank's requirements. Notify the bank of the change and provide proof of the new coverage.

+−Does mortgage life insurance decrease over time?

Yes, decreasing term life insurance (the most common type for mortgages) reduces the coverage amount as your outstanding mortgage balance decreases. This keeps premiums lower than level-term coverage.

+−Is mortgage insurance tax-deductible?

Mortgage insurance premiums are generally not tax-deductible in Israel for a primary residence. For investment properties, insurance costs may be deductible as a rental expense.