The safest way to mortgage

Existing property pledge

What is an Existing Property Pledge?

A mortgage on an existing property (mortgage called in Israel : “for any purpose”) is a loan that can be obtained through an apartment that you already own. For the banks, it is considered as a second mortgage. If you own an apartment or other real estate property and you need money, you can pledge this property and get a mortgage.

The loan amount can be obtained for any purpose, whether it is to help a child to purchase a property, for renovations, events, travel etc.

Amounts obtained from banks can reach 50% of the value of the mortgaged property. For example, if someone mortgages a house that is worth 2 million, she can receive a loan of up to 1 million shekels.  

If there is already an existing mortgage on the apartment, it is possible to receive an additional mortgage up to 50% of the value of the property. It is important to note that in this situation, the second mortgage should be taken at the same bank.

What are the benefits of pledging an existing property?

The significant advantage of this mortgage lies in the good conditions of this loan compared to other loans since the bank has a good security. In addition, the amount obtained from this type of mortgage is higher than regular loans. Also, it can be extended over many more years than the regular one (up to 20 years), facilitating smaller monthly repayments.

What are the disadvantages of pledging an existing property?

Unlike a conventional mortgage to purchase an apartment where most of the money is transferred to the seller of the apartment, this mortgage is directly transferred to you and, therefore, the risk associated with the loan is higher and as a result, also the interest rates. In addition, it is generally worthwhile to borrow more than 100,000 NIS (shekels) because of the costs involved in the process (appraiser’s assessment, registration of a mortgage in the land registry, etc.).

Contact us now for mortgage advices and more details about your options

Itay Mardix – Financial and Mortgage Advisor.
Phone number – 052-6007476
Office – 074-7419441

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