The question behind every mortgage
Before a bank looks at the apartment, it looks at one ratio: how much of your monthly income will go to the mortgage. In Israel this is called PTI, payment-to-income (שיעור החזר מהכנסה). Two numbers matter, 50% and 40%, and they mean different things.
The two rules in Directive 329
Directive 329 (הוראה 329) is the Bank of Israel (בנק ישראל) rule book for housing loans, issued by the Supervisor of Banks (הפיקוח על הבנקים). The version in force since June 2026 says:
- 50% is a hard limit. A bank may not approve or grant a housing loan if the payment is more than 50% of your income. Exactly 50% is allowed; 50.1% is not.
- 40% is a cost threshold, not a ban. If the payment is above 40%, the bank must give the loan a 100% risk weight, which means it has to set aside far more of its own capital against it. The Bank of Israel describes such loans as high risk and expected to cost the borrower more.
Because of that capital cost, banks rarely go there. In August 2026 the average PTI on new mortgages was 29.2%, and loans between 40% and 50% PTI were only about 0.4% of new mortgage money. In practice, plan on 40% as your ceiling and treat anything above 35% as tight. The Bank of Israel notes that a large share of loans sit at about 30% to 40% of income, and banks can always be stricter than the regulation.
Which income counts
PTI is not measured on your gross salary. It is measured on disposable monthly income (הכנסה חודשית פנויה): net income, after tax and social security, minus fixed expenses.
- Net income counts only if it meets three conditions: it is paid regularly, the bank has documents supporting it, and the bank has proof of payment, such as deposits into your bank account.
- Both borrowers count. The full disposable income of a spouse or partner who lives with you in the home counts.
- A first-degree relative (parent, sibling, child) who is not buying can add at most half of their disposable income, and only if they guarantee the loan, pass the same affordability check, and pay at least 20% of each instalment from their own account.
- Fixed expenses are deducted: any loan or obligation with more than 18 months left, alimony, and your rent if you will not live in the apartment you are buying (even if the lease ends sooner).
For olim, the directive does not single out foreign income or a short Israeli work history. What it asks is that income be regular, documented and visibly paid into your account. How a particular bank treats a salary paid from abroad, in a foreign currency, or after only a few months in an Israeli job is its own credit policy, and it differs between banks. Ask each bank directly and bring payslips, employment contracts, tax returns and bank statements that show the deposits.
It covers all your loans on the same home
The payment side includes the whole mortgage you are asking for, at the full approved amount. For loans approved from 1 October 2026, it also includes earlier loans secured on the same property with more than 18 months left, whether they are from the same bank, another bank or a non-bank lender. Other long-term debts, such as a car loan, are not added to the payment; they are deducted from your income instead. Either way, splitting your borrowing between banks does not get you around the limit.
From the ratio to a maximum loan
Once you know the largest payment you are allowed, the maximum loan follows from the standard annuity formula used for Israeli mortgages (לוח שפיצר, Spitzer schedule):
Maximum loan = maximum payment × (1 − (1 + r)^−n) ÷ r, where r is the annual rate divided by 12 and n is the number of monthly payments.
Worked example: a household with ₪10,000 disposable net income a month, a 5% rate and a 30-year term (n = 360, r = 0.05 ÷ 12 ≈ 0.004167). The factor (1 − (1 + r)^−360) ÷ r is about 186.28.
- At 50% PTI the payment can reach ₪5,000, so the maximum loan is 5,000 × 186.28 ≈ ₪931,000. That is the legal limit.
- At 40% PTI the payment is ₪4,000, so the loan is 4,000 × 186.28 ≈ ₪745,000. That is closer to what banks actually approve.
- At the market average of about 29%, the payment is ₪2,900 and the loan about ₪540,000.
This is a simplification. Real mixes combine tracks with different rates, and CPI-linked tracks (linked to the Madad, מדד, the consumer price index) can see their payments rise with inflation, so leave yourself room. The loan is also capped by the price of the home: at most 75% for a single home, 70% for a replacement home and 50% for an investment property. The lower of the two limits wins.
How to raise your limit
- Choose a longer term. The legal maximum is 30 years.
- Pay off loans with more than 18 months left before you apply.
- Add a co-borrower spouse, or a first-degree relative as a paying guarantor.
- Put in more equity so you need a smaller loan.
- Shift the mix toward tracks with a lower starting payment, keeping in mind that variable-rate parts may not exceed 66.66% of the loan.
In the ribit simulator
Enter your net monthly income and the simulator shows the maximum loan up front, before you build a mix. It refuses any mix whose payment would exceed 50% of your income, because no bank may approve it. Treat that maximum as the legal edge, not a target: above 40%, most banks will say no.