Calcalist, Adrian Pilot,  15.12.20 

The Supervisor of Banks did well, abolishing the controversial limitation on taking out a variable-rate mortgage - including Prime - and leaving only the limitation that a third of the mortgage must be taken out at a fixed interest rate.

The purpose of the move is welcome: Since the prime interest rate track is the cheapest, it means that converting the other fixed tracks to a prime interest rate or variable will save all mortgage applicants - and especially those who have already taken and can refinance - several hundred shekels a month. At a time when the unemployment rate is double-digit and the economy is going through the most severe recession since the establishment of the state, this decision is called for because without adding or spending even a single shekel, the Bank of Israel launched a disposable amount of disposable income.

However, there are two holes in the course: one small, the other larger. One big problem, very common in economics, is that sometimes one seeks to help one group, but the incentive goes into the wrong hands or those I did not want to help. Usually they are also the strongest players in the market. The reference here is to both contractors and banks, two players who do not need government assistance nor the pity of anyone.

Contractors - given the decline in housing supply - are likely to raise apartment prices and roll out the benefit to themselves, as the vast majority of apartment buyers look at the monthly repayments and less at the total price of the property. The banks - the second player - can roll over all the benefit to themselves as they charge prime interest minus a certain rate in this route (e.g. prime minus 0.7%). Now, they can reduce the discount and enjoy the benefit. But here the Bank of Israel has much more influence. The Bank of Israel is already defending itself and explaining that the mortgage segment is the most competitive, and Israelis tend to shop.

It is worthwhile for the Supervisor of Banks, Yair Avidan, to catch a close conversation with the bank managers who will not use the period and the assistance to their advantage. According to the banks' results, this is one of the few entities for which the corona is a mere blow to the wing, and nothing more. So according to the profits they manage to rake in from the general public. As former Finance Minister Moshe Kahlon put it: Banks are like dedicated - they cut back and forth. Therefore, this time too it is not worth building on their kindness.