Want a 40-year mortgage? The new players storming your mortgage market

Israel's largest insurance companies, led by Harel, Menora Mivtachim, Clal Insurance, and Phoenix, are storming the mortgage market, which is almost entirely controlled (about 95%) by the banks. Harel is establishing a dedicated company that will offer more flexible terms, including a 40-year spread and financing of up to 80% of the property's value. The entry occurs against the backdrop of a regulatory change by the Bank of Israel that will make it harder for banks to provide additional credit secured by property, raising concerns about transferring risks outside the banking system.

Israel's largest insurance companies are storming the mortgage market, which until now has been almost entirely controlled (about 95%) by the banks. Calcalist reveals that Harel is expanding its activity in the field and establishing a dedicated company, Harel Mortgages, which will offer more flexible terms than the banks: financing of up to 80% of the property's value, deferral of principal payments for up to ten years, and a 40-year spread (compared to 30 years at banks). Menora Mivtachim has already begun offering mortgages this year, Clal Insurance has marked the sector, and Phoenix is preparing to enter through its credit arm Gamma. Migdal, in contrast, does not currently see credit as an attractive growth engine. The entry occurs against the backdrop of a regulatory change by the Bank of Israel that will take effect on October 1, 2026, which will make it harder for banks to provide additional credit secured by the same property. Insurance companies are not subject to these instructions, which may make them an alternative for borrowers who have difficulty obtaining bank financing. However, senior figures in the credit and banking industries express concern about transferring risks outside the banking system, warning of a situation similar to the subprime crisis. Harel rejects the comparison and emphasizes that institutional bodies have long-term sources and quality underwriting systems. The article quotes Arik Peretz, CFO of Harel, and Kobi Kalman, CEO of Harel Mortgages, explaining the strategy.