If you are taking a mortgage in Israel and English is your first language, the first surprise is usually this: you are not taking one loan. You are taking two to four, bundled into a single agreement. Israelis call the split the תמהיל (tamhil, "mix"), and there is no real equivalent in the American or British systems.
Each component has its own amount, its own interest rate, its own term, and its own rate type. The way you divide the loan between them determines your monthly payment, your total interest, and how much either one moves when rates change.
This article explains the tracks, what the Bank of Israel requires, and works a full example with numbers.
Why Israel does it this way
In most countries you choose a mortgage the way you choose a phone plan: one rate, one term, done. In Israel the bank builds the loan out of several tracks, and the composition is part of what you negotiate.
The practical consequence for a newcomer is that comparing two offers is harder than comparing two rates. A lower headline rate on one component can be paired with a composition that leaves far more of your payment exposed to change. You are comparing structures, not numbers.
The tracks
| Track | Hebrew | Rate | CPI-linked? | What it means |
|---|---|---|---|---|
| Fixed, non-linked | קל״צ (kalatz) | Fixed | No | Identical payment every month for the whole term. The most predictable, and usually the most expensive in rate terms. |
| Fixed, CPI-linked | קבועה צמודה | Fixed | Yes | The rate is fixed, but the principal is revalued with the consumer price index — so the payment still moves. |
| Prime | פריים | Variable | No | Tracks the Bank of Israel rate. Moves as soon as the central bank moves — in both directions. |
| Variable every 5 years | משתנה כל 5 שנים | Resets on a schedule | Both versions exist | Stable for five years, then repriced against a pre-agreed benchmark. |
The CPI-linked concept is the one that catches newcomers out. In a linked track the outstanding principal is adjusted upward with inflation. Your rate can be genuinely fixed while your balance, and therefore your payment, still grows. It is not a variable rate, and it is not a fixed payment either.
What the Bank of Israel requires
The composition is regulated, not free-form. As of August 2026:
At least one third at a fixed rate. A minimum of 33% of the loan must sit in a track whose rate does not move.
Therefore at most two thirds variable. This is not a separate rule — it is the arithmetic complement of the first.
Prime is no longer separately capped. There used to be a distinct one-third ceiling on prime. It was removed, so prime can now go up to two thirds like any other variable component.
Loan-to-value. Up to 75% for a single/first home, 70% when replacing an existing home, 50% for an additional property.
- Maximum term: 30 years.
Payment-to-income. The monthly payment should not exceed 50% of net income. Above 40% the loan is treated as higher risk, and in practice many banks prefer to stay nearer one third.
The fixed-third rule dates from the zero-rate era, when whole loans sat on prime and every rate rise landed directly on the monthly payment. The mandatory fixed portion is a shock absorber the regulator built into the system.
These limits are updated periodically. Check the Bank of Israel for the binding text, and note that individual banks may impose stricter conditions of their own.
A worked example
A mortgage of ₪1,200,000 over 25 years, split into three equal parts.
The rates below are illustrative only. They are not current market quotes and not a forecast. The point is to show how the arithmetic behaves.
| Track | Amount | Rate (illustrative) | Monthly | Total interest |
|---|---|---|---|---|
| Fixed non-linked | ₪400,000 | 5.0% | ₪2,338 | ₪301,508 |
| Prime | ₪400,000 | 6.0% | ₪2,577 | ₪373,162 |
| Fixed CPI-linked | ₪400,000 | 3.5% | ₪2,002 | ₪200,748 |
| Combined | ₪1,200,000 | — | ₪6,918 | ₪875,418 |
Two thirds of this loan sits at a fixed rate — comfortably above the one-third minimum.
Of the ₪6,918 monthly payment, ₪4,340 cannot move with market rates. ₪2,577 can.
Why split at all: the number that explains it
Suppose the prime rate rises by one percentage point. This is a sensitivity check, not a prediction.
| Scenario | Payment before | Payment after | Change |
|---|---|---|---|
| The mix above (one third prime) | ₪6,918 | ₪7,168 | +₪250 (3.6%) |
| Entire loan on prime | ₪7,732 | ₪8,481 | +₪750 (9.7%) |
Same rate move, three times the impact. That is the entire point of a mix: not to chase the lowest rate, but to decide how much of your payment is exposed to things outside your control.
The trade runs both ways. If rates fall, the diversified mix benefits less. Less exposure to risk is also less exposure to luck.
How to think about choosing
There is no single correct mix, and anyone selling you one is selling you something. These are the questions the split actually answers:
How much payment volatility can you absorb? If ₪500 a month would break your budget, that is a real constraint.
How long do you expect to hold the mortgage? Planning to sell or refinance in a few years changes the calculation, because early-repayment fees on fixed tracks can be substantial.
How predictable is your income? Salaried and stable absorbs volatility differently from variable or self-employed.
How exposed do you want to be to inflation? A linked track shows a lower rate, but the principal itself grows with the index.
The practical approach is to build two or three candidate mixes and put them side by side — same amount, same term, different splits — and see what happens to the payment and the total interest. That is exactly what we built LoanWise for: set up two to four components, move an amount or a rate, and see immediately what it did.
What this calculation excludes
Every figure above is principal and interest only. It excludes taxes, mortgage and structure insurance, file-opening fees, appraisals, and other closing costs.
Projections for variable and index-linked tracks follow the assumptions you enter. Nobody knows where rates or the index are going, and this article does not try to guess.
LoanWise is a calculator. It is not a bank, not a mortgage broker, and not financial advice. The number your bank gives you will differ, and theirs is the one that counts.
Once you have a mix, the next document to read is the schedule itself — see the mortgage amortization schedule for how Spitzer and equal-principal repayment split each payment.
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Start Your CalculationFAQ
How many tracks should a mix have?
Most mixes use two to four. Fewer than two is difficult, because the fixed-third rule effectively forces a split. More than four adds complexity without much benefit.
What is the recommended mix?
There isn't one. A mix that suits someone selling in five years is wrong for someone staying thirty. Articles promising "the winning mix for 2026" ignore the only variable that actually decides it — your situation.
Can I change the mix after taking the mortgage?
Yes, by refinancing (mihzur). But refinancing has a cost — early-repayment fees on fixed-rate tracks can be significant. It is not irreversible, but it is not free.
Is a fixed rate always safer?
Safer in the sense of certainty, yes. Cheaper, not necessarily. Certainty is priced: fixed rates are usually quoted higher, and in a fixed linked track the principal still moves with the index.
Do I need Hebrew to get a mortgage in Israel?
The documents will be in Hebrew and the binding text is Hebrew. Understanding the structure before you sit down is the part this article can help with; the paperwork itself is a separate problem.
