New mortgages down 4.8 percent in January-September - Mortgage banks granted NIS 16 billion in credit

The number of new mortgages fell by 4.8 percent in January-September 2006, compared with the corresponding period of 2005 says Leumi Mortgage Bank Ltd. The amount of credit granted by mortgage banks fell to NIS 16 billion from NIS 16.8 billion in the corresponding period; these figures do not include credit granted by contractors.

Credit for people eligible for government mortgages fell a further NIS 1.6 billion in January-September, including NIS 200 million in standing loans and conditional loans, 12 percent less than last year, and comes after a 25.6 percent drop in 2005. The number of borrowers eligible for these loans fell by 10 percent, mostly because of a change in the method of credit points.

Leumi Mortgage Bank did not state the aggregate amount of refinanced mortgages. However, banks' financial reports for the second quarter indicate a 74 percent drop to NIS 1.3 billion in the first half of the year from NIS 5 billion in the first half of last year. At Leumi Mortgage Bank, the volume of refinanced mortgages fell 82 percent to NIS 578 million from NIS 3.2 billion.

The cost of loans has risen. The average cost of index-linked credit has risen from 3.97 percent last year to 4.26 percent, and the average interest on index-linked loans has risen to 4.84 percent since January, compared with the 2005 average of 4.31 percent.

Fixed interest index-linked loans account for 55 percent of all loans, down from 75 percent in 2005 as a whole.