Two limits decide the size of your mortgage, and the lower one wins: repayment capacity (how much you can pay each month) and loan-to-value (how much the bank will lend against the property). Most people focus on the second, because it sounds like a savings target. In practice the first is usually what stops you.
Ceiling one: repayment capacity
The bank looks at your monthly payment as a share of net income:
Up to 50% — the regulatory maximum
Above 40% — treated as higher risk, and priced accordingly
In practice many banks prefer to stay near one third
On a net household income of ₪20,000, at 5% over 25 years:
| Payment-to-income | Monthly payment | Mortgage it supports |
|---|---|---|
| 33% | ₪6,600 | ₪1,128,996 |
| 40% | ₪8,000 | ₪1,368,480 |
| 50% | ₪10,000 | ₪1,710,600 |
Nearly ₪600,000 separates the top and bottom rows — on identical income.
Ceiling two: loan-to-value
The Bank of Israel caps borrowing against the property's value:
| Purchase type | Max financing | Equity required |
|---|---|---|
| Single / first home | 75% | 25% |
| Replacement home | 70% | 30% |
| Additional property | 50% | 50% |
With ₪500,000 of equity on a first home, the most expensive property is ₪2,000,000, and the largest mortgage is ₪1,500,000.
Those same caps sit beside the rules that govern how the loan is split. The Israeli mortgage mix covers that composition; this article stays on the size.
Which ceiling actually binds
Put both side by side — ₪20,000 income, ₪500,000 equity, one-third payment ratio:
| Constraint | Maximum mortgage |
|---|---|
| Repayment capacity | ₪1,128,996 |
| Loan-to-value | ₪1,500,000 |
Repayment capacity binds. The bank will not lend ₪1.5 million even though the equity would allow it.
Which leads somewhere practical: in this situation, saving more deposit will not get you a bigger mortgage — it gets you a more expensive property. Those are different goals, and it is worth knowing which one you are pursuing.
Flip the situation — high income, small deposit — and saving is exactly what changes the picture.
The third lever: term
You can raise capacity without earning more, by stretching the term. The Israeli maximum is 30 years.
The same ₪6,600 a month:
| Term | Mortgage | Total interest |
|---|---|---|
| 25 years | ₪1,128,996 | ₪851,004 |
| 30 years | ₪1,229,459 | ₪1,146,541 |
₪100,462 more mortgage, for ₪295,537 more interest. Each extra shekel of borrowing costs almost three shekels of interest. The amortization schedule shows how that interest is built, payment by payment.
That does not make a longer term wrong. It makes it a trade you should see clearly.
What else the bank weighs
Beyond the two ceilings:
Income stability — salaried and permanent is assessed differently from self-employed
Existing obligations — other loans reduce capacity
Age — the mortgage generally has to conclude by age 80–85
- Credit history
How to check before you walk in
Three steps:
- Take net income and multiply by 0.33
- Work out what mortgage that payment supports
- Compare with what your equity allows under the loan-to-value cap
The lower figure is yours. LoanWise lets you enter an amount and see the payment immediately, then work backwards.
The cash you need can also exceed the deposit itself. That is a different question from which ceiling binds, and this article does not cover it.
What this calculation excludes
Principal and interest only, and the rate is illustrative. A flat 5% hides the fact that Israeli rates move — see how the prime rate works. Banks assess capacity by their own procedures, which can be stricter.
LoanWise is a calculator. Not a bank, not a broker, not financial advice.
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Start Your CalculationFAQ
How much mortgage can I get?
The lower of two figures: what your repayment capacity supports, and what the loan-to-value cap allows.
What is repayment capacity?
The ratio of monthly payment to net income. The ceiling is 50%; above 40% is treated as higher risk.
If I save more deposit, will I get a bigger mortgage?
Not necessarily. If repayment capacity is the binding constraint, more deposit buys a more expensive property, not a larger loan.
Does a longer term increase what I can borrow?
Yes, at a cost. In the example above, ₪100,462 more borrowing costs ₪295,537 more interest.
