The mortgage has become in recent years one of the heaviest expenses of households in Israel. What was supposed to be a tool for financing a home purchase has turned for many families into a swelling burden that reduces disposable income.

If in 2019 the average monthly repayment stood at about NIS 4,200, in the years 2024–2025 it already surged to about NIS 5,800 a month. The meaning is an addition of about NIS 1,600 every month, an amount that many households are forced to scrape from the food, education, and leisure budget.

The State Comptroller, Matanyahu Englman, places a significant part of the responsibility for this development on the Banking Supervision. The Comptroller points to the Bank of Israel's decision from the end of 2020 to abolish the limit on the Prime component in mortgages, a move that was presented to the public as good news that would reduce repayments and increase the flexibility of borrowers.

The public indeed rushed to the Prime track. However, at the time the decision was made, according to the Comptroller, sufficient staff work was not performed to examine the implications in the event of a sharp interest rate increase. When the Bank of Israel began to raise the interest rate to deal with inflation, hundreds of thousands of borrowers found themselves facing a sharp surge in monthly repayments. According to the Comptroller's data, the average repayment increased within a very short period by more than NIS 1,000 a month.

In parallel, the mortgage market continued to swell. By mid–2025, the public's mortgage portfolio already stood at about NIS 630 billion, while the average mortgage crossed the threshold of NIS 1 million.

The Comptroller also warns against another phenomenon that expanded in recent years: Contractor financing campaigns. These are "20%–80%" type transactions or balloon loans, in which buyers pay a small part of the apartment price at the time of signing and the balance only upon receiving the key.

According to the Comptroller's findings, these campaigns create an illusion of accessibility and allow buyers to postpone dealing with raising the bulk of the financing. However, in two or three years, when the payment date arrives, no one knows what the apartment prices will be, what the interest rate environment will be, and what the mortgage conditions will be. The Comptroller warns that this is a significant risk to buyers and to market stability.

This concern also finds expression in the risk data. As of July 2025, about 31% of the mortgage portfolio was defined as high risk, compared to only about 20% at the beginning of 2022. Within three years alone, a sharp increase was recorded in the volume of loans considered riskier.

The Comptroller also criticizes the low level of competition in the market. Despite reforms intended to make it easier to compare offers between banks, in 2024 about 63% of borrowers settled for an offer from one bank only. Even those who wish to improve conditions encounter difficulties. In the first half of 2025, about 80% of mortgage refinancers carried out the move within the existing bank, and did not switch to a competing bank.

The Comptroller also points to a continuous failure regarding assistance to those eligible. For nine years, the property value ceiling for receiving benefits under Directive 329 was not updated, and it remained at NIS 1.8 million, even though apartment prices surged during this period by more than 52%.

Only in February 2026, following the audit, was the ceiling updated to NIS 2.1 million. However, even this update, the Comptroller determines, was carried out with a significant delay, and it was linked to the Consumer Price Index and not to the Apartment Price Index. The meaning is that the gap between eligibility conditions and actual apartment prices continues to widen, and particularly hurts weaker populations and young couples.