Mortgage Tracks — Full Comparison

All mortgage tracks: Prime, fixed, variable, CPI-linked — pros, cons, and how to build the right mix.

Israeli mortgages (Mashkantaot) are structured differently from most countries — instead of one loan at one rate, your mortgage is divided into multiple tracks (Maslulim), each with its own interest type and risk profile. Understanding these tracks is essential for getting the best deal.

The Main Mortgage Tracks in Israel

Israeli banks offer several track types: Fixed rate not CPI-linked (Kvua Lo Tzamuda) — a fixed monthly payment that never changes. CPI-linked fixed rate (Kvua Tzamuda) — a fixed rate but the principal adjusts with inflation. Prime-linked variable rate (Ribuah Meshanah Prime) — fluctuates with the Bank of Israel's Prime rate. Variable rate linked to government bonds (Mishtanah Kol 5 Shanim) — resets every 5 years based on bond yields.

How to Mix Tracks

By regulation, no single track can exceed two-thirds of your total mortgage. Banks typically recommend a mix that balances stability and cost. A common conservative mix might be one-third fixed, one-third CPI-linked, and one-third Prime. More aggressive borrowers might lean heavier on Prime when interest rates are low.

Understanding the Risks of Each Track

Fixed non-linked is the safest — your payment never changes, but rates are higher. CPI-linked is risky during high inflation because your outstanding balance grows. Prime-linked offers low starting rates but can jump sharply if the Bank of Israel raises rates. Each track has a tradeoff between certainty and cost.

Choosing Your Track Mix

Your choice should reflect your financial stability and risk tolerance. If you have a tight monthly budget, lean toward fixed tracks for predictability. If you have financial cushion and expect to refinance or repay early, variable tracks may save money. Always model different interest rate scenarios before deciding.

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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 are the main mortgage tracks in Israel?

Fixed non-CPI-linked (stable payments), CPI-linked fixed (adjusts with inflation), Prime-linked variable (fluctuates with Bank of Israel rate), and variable linked to bond yields (resets every 5 years). Most mortgages combine several tracks.

+−Can I put my entire mortgage in one track?

No, Israeli regulation limits any single track to no more than two-thirds of your total mortgage. Banks typically recommend a mix that balances stability and cost across multiple track types.

+−Which track is safest?

Fixed non-CPI-linked is the safest — your payment never changes. But it has higher rates. CPI-linked is risky during high inflation. Prime-linked offers low starting rates but can jump sharply if rates rise. Choose based on your risk tolerance and budget flexibility.

+−What is the two-thirds rule in Israeli mortgages?

Israeli regulation limits any single track type to no more than two-thirds of your total mortgage. This forces diversification across tracks, reducing the risk that one type of rate movement devastates your payments.

+−How does inflation affect a CPI-linked mortgage track?

Your outstanding balance and payments rise with the Consumer Price Index. In years of high inflation, this can significantly increase both your monthly payment and total debt. Consider limiting CPI-linked exposure to 20-30% of your mortgage.

+−What is a recommended track mix for first-time buyers?

A common conservative mix is one-third fixed non-CPI-linked, one-third Prime-linked, and one-third CPI-linked fixed. Adjust based on your risk tolerance and whether you expect interest rates or inflation to rise.

+−Can I change my mortgage track mix after signing?

Not directly, but you can refinance your mortgage with the same or different bank to restructure your tracks. This involves early repayment fees on existing tracks, so calculate whether the savings justify the cost.