Parents helping with the mortgage? Bank of Israel clarifies: Only half of their income will be considered

The Bank of Israel has issued a new clarification stating that banks may only consider half of the disposable income of a relative who is not a property owner, even if they are bearing the full mortgage payments. The restriction applies to the 'borrower swap' practice and may make it harder for young couples.

The Bank of Israel has published a new clarification that limits the ability of parents to help their children finance a home purchase by joining the mortgage. According to the clarification, banks may only consider half of the disposable income of a relative who is not a property owner, even if they are bearing the full mortgage payments. Previously, the full income of the parents could be taken into account. The restriction applies to the practice known as 'borrower swap', where parents join the loan as borrowers due to their higher earning capacity. The Banking Supervision Department began promoting the restriction in February 2026, and the directive now appears in the updated document as a binding clarification. The restriction may particularly affect young couples and continuing sons in agricultural settlements. The change joins another update by the Bank of Israel that took effect on October 1, regarding the calculation of the payment-to-income (PTI) ratio.

Parents helping with the mortgage? Bank of Israel clarifies: Only half of their income will be considered