Israeli mortgage vs French prêt immobilier: differences for French olim

Criterion	Israel (mashkanta)	France (prêt immobilier)
Structure	A mix of tracks (tamhil), each with its own rate type, indexation and term	Usually one loan at a fixed rate; household debt is almost entirely fixed-rate
Rate type	At least 33.34% fixed and at most 66.66% variable (Prime, Matz, reset tracks); Prime = Bank of Israel rate + 1.5 plus or minus your margin	Fixed rate is the norm; variable-rate loans are rare and usually capped (capé)
CPI indexation	Common: Katz, Matz and Zakaut are linked to the Madad, so the balance rises with inflation	Not part of a standard prêt immobilier: payments do not follow inflation
Income limit	Payment at most 50% of disposable income (hard limit); above 40% the bank holds more capital, so approvals are rare	Debt ratio at most 35% of income, insurance included (HCSF); banks may depart from it on up to 20% of their quarterly lending
Maximum term	30 years (Directive 329)	25 years (HCSF), with a deferral tolerance for new builds or works
Loan-to-value	Hard limits: 75% single home, 70% replacement home, 50% investment property or foreign resident; mortgage insurance does not raise them	No regulatory LTV cap; the bank decides and usually expects a deposit (apport)
Early-repayment fee	A formula: capitalization fee on fixed tracks if market rates fell (20% off after 3 years, 30% off after 5); none on Prime, the Zakaut loan, or reset dates	Capped by law: the lower of 6 months' interest on the amount repaid and 3% of the capital outstanding; none after a sale due to a job move, forced job loss or death
Insurance	Life and property insurance; the bank may require it only if it is the irrevocable beneficiary, and you may buy it outside the bank (Directive 451)	Borrower insurance (assurance emprunteur), counted in the 35% ratio
Legal process	A lawyer checks the Tabu, advises on the contract and registers the mortgage	A notaire drafts the deed and registers the mortgage

Criterion

Israel (mashkanta)

France (prêt immobilier)

Structure

A mix of tracks (tamhil), each with its own rate type, indexation and term

Usually one loan at a fixed rate; household debt is almost entirely fixed-rate

Rate type

At least 33.34% fixed and at most 66.66% variable (Prime, Matz, reset tracks); Prime = Bank of Israel rate + 1.5 plus or minus your margin

Fixed rate is the norm; variable-rate loans are rare and usually capped (capé)

CPI indexation

Common: Katz, Matz and Zakaut are linked to the Madad, so the balance rises with inflation

Not part of a standard prêt immobilier: payments do not follow inflation

Income limit

Payment at most 50% of disposable income (hard limit); above 40% the bank holds more capital, so approvals are rare

Debt ratio at most 35% of income, insurance included (HCSF); banks may depart from it on up to 20% of their quarterly lending

Maximum term

30 years (Directive 329)

25 years (HCSF), with a deferral tolerance for new builds or works

Loan-to-value

Hard limits: 75% single home, 70% replacement home, 50% investment property or foreign resident; mortgage insurance does not raise them

No regulatory LTV cap; the bank decides and usually expects a deposit (apport)

Early-repayment fee

A formula: capitalization fee on fixed tracks if market rates fell (20% off after 3 years, 30% off after 5); none on Prime, the Zakaut loan, or reset dates

Capped by law: the lower of 6 months' interest on the amount repaid and 3% of the capital outstanding; none after a sale due to a job move, forced job loss or death

Insurance

Life and property insurance; the bank may require it only if it is the irrevocable beneficiary, and you may buy it outside the bank (Directive 451)

Borrower insurance (assurance emprunteur), counted in the 35% ratio

Legal process

A lawyer checks the Tabu, advises on the contract and registers the mortgage

A notaire drafts the deed and registers the mortgage

Which one should you choose?

If you come from France, expect a payment that can move: Prime and CPI-linked tracks are normal in Israel, a fixed-rate loan like the French one (Kalatz) usually costs more, and the early-repayment fee is a formula, not a flat cap. Choose your mix by what your budget can absorb, not by the lowest starting payment.

A mix of tracks instead of a single fixed loan

In France the usual loan has one rate for its whole life, so the payment is known at signing. In Israel the bank splits the mortgage into tracks (the tamhil), and the rule is only that at most 66.66% may be variable. A part in Prime follows each Bank of Israel decision, and a part in Katz or Matz grows with the Madad.

The closest thing to a French loan is Kalatz: fixed, not linked to the Madad. It is allowed for the whole loan, but its rate is usually higher than the starting rate of the other tracks, and leaving it early can cost a capitalization fee.

Limits that decide how much you can borrow

The HCSF sets the French debt ratio at 35% of income, insurance included, and the term at 25 years. Israel works differently: Directive 329 forbids a payment above 50% of disposable income (net of tax and fixed obligations), and above 40% banks rarely lend. For a household with ₪10,000 of disposable monthly income, the legal maximum payment is ₪5,000, while banks usually stay nearer ₪4,000. The two ratios use different bases, so do not compare 35% and 50% directly.

Israel also sets hard loan-to-value caps (75%, 70% or 50%), and a bank asks that income be regular, documented and visibly paid into your account. How it treats a salary earned in France or paid in euros is its own credit policy, so ask each bank.

Leaving early, insurance and paperwork

French law caps the early-repayment indemnity at the lower of 6 months' interest on the amount repaid and 3% of the capital outstanding. The Israeli fee has no flat cap: it depends on the gap between your rate and the Bank of Israel average, the remaining term and the age of the loan. Prime and the Zakaut loan carry no capitalization fee.

On insurance, Israeli banks cannot force you to buy their policy: you may insure outside the bank if the bank is the irrevocable beneficiary. On paperwork, an Israeli lawyer replaces the notaire's role in checking the Tabu (land registry) and registering the mortgage, and you hire your own.

Frequently asked questions

Is the Israeli 50% payment limit comparable to the French 35% debt ratio?

Not directly. Israel measures the payment against disposable income, which is already net of tax and fixed obligations, and the practical ceiling is 40%. France measures the debt ratio, insurance included, against income under the HCSF rule. Use the simulator to see the maximum loan for your own income.

Is there a cap on the early-repayment fee in Israel like in France?

Not a flat percentage. The fee is calculated by a formula set by the Bank of Israel order. Prime and the Zakaut loan carry no capitalization fee, a reset track repaid on its reset date carries only a small operational fee, and the fee on fixed tracks falls by 20% after 3 years and by 30% after 5.

Can I get a fully fixed-rate mortgage in Israel, like in France?

Yes. The law only limits the variable part to 66.66%, so you can put the whole loan in Kalatz, Katz or Zakaut. Kalatz is the closest to a French loan, but its rate is usually higher than the other tracks and early repayment can cost a fee.

Does my French income count for an Israeli mortgage?

Directive 329 does not exclude foreign income. It asks that income be regular, documented and visibly paid into your account. How a given bank treats a salary from abroad, in euros or after a short Israeli work history is its own policy and differs between banks, so bring payslips, contracts, tax returns and statements.