Calculate your home equity position in Israel. Enter current property value, outstanding mortgage balance, and acquisition costs to see equity amount, LTV ratio, and net position.
Calculate your current home equity position in Israel. Equity is the property value minus the outstanding mortgage balance. The LTV ratio shows how much of the property is mortgaged.
Current equity
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Property value
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Mortgage balance
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Equity amount
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LTV ratio
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Your breakdown
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How to track your equity position over time
Your home equity changes every month from two forces working simultaneously. The mortgage amortization schedule repays a small amount of principal each month, reducing the balance and increasing equity by that amount. Separately, the market value of the property fluctuates based on the local property market, economic conditions, and changes in interest rates. Equity grows fastest when both forces move in your favour: the market rises and the mortgage balance falls. In the early years of a standard mortgage, principal repayment is slow (most of the payment goes to interest), so appreciation tends to dominate equity growth. After 15 to 20 years, the balance has fallen significantly and principal repayment accelerates, making the mortgage amortization a stronger contributor to equity growth.
Net equity after acquisition costs
Gross equity is property value minus mortgage balance. Net equity, which is a more accurate measure of your true financial position, also subtracts the acquisition costs you paid when buying the property. These include Mas Rechisha (purchase tax), lawyer fees, agent commission, renovation costs, and any other expenses incurred to acquire the property. These costs are sunk once paid and cannot be recovered if you sell immediately. If you buy a property for 2,000,000 ILS, pay 100,000 ILS in acquisition costs, and the property is immediately worth 2,000,000 ILS, your net equity is not 500,000 ILS (assuming 25 percent down payment) but rather 400,000 ILS after acquisition costs. The property needs to appreciate by at least the acquisition cost before you break even in net equity terms.
Using equity to access further financing
When your LTV falls below the Bank of Israel cap (typically 75 percent for owner-occupiers), you may have the option to release equity through a second mortgage or home equity loan. This is commonly used in Israel to fund renovation, a down payment on a second property, or other large expenses. The maximum total mortgage (first plus any second) is still capped at the regulatory LTV limit based on the current appraised value. Note that using equity for an investment property purchase changes your classification from single-home buyer to investor, which affects the Mas Rechisha rate on the second purchase. Tax and legal advice is advisable before releasing equity for investment purposes.
Frequently asked questions
How is home equity calculated in Israel?
Home equity is the portion of the property value that you own outright, calculated as the current market value of the property minus the outstanding mortgage balance. For example, if your apartment is currently worth 2,500,000 ILS and you still owe 1,200,000 ILS on the mortgage, your equity is 1,300,000 ILS. Equity increases over time through two mechanisms: mortgage repayment, which reduces the outstanding balance, and property price appreciation, which increases the property value. In Israel, where property prices have historically risen substantially, appreciation has often contributed more to equity growth than mortgage amortization, particularly in the early years of a long-term mortgage when principal repayment is slow.
What is a loan-to-value (LTV) ratio and why does it matter in Israel?
The loan-to-value ratio is the outstanding mortgage balance divided by the current property value, expressed as a percentage. An LTV of 70 percent means you owe 70 percent of the current value and own 30 percent as equity. LTV matters in Israel for several reasons. Banks use LTV to assess risk and may require additional mortgage insurance or impose different rates for high-LTV loans. The Bank of Israel uses LTV caps to regulate lending: the maximum LTV for a first-home purchase is 75 percent (25 percent down payment). If property prices fall, LTV rises; if prices fall below the level where LTV exceeds 100 percent, the owner has negative equity and owes more than the property is worth. Tracking your LTV helps you understand how exposed you are to a price correction and when you might be eligible to refinance on better terms.
Can I borrow against my home equity in Israel?
Yes. Israeli homeowners with substantial equity can apply for a home equity loan (halva’at giv) or a second mortgage (mashkanta shniya) secured against the property. The maximum combined LTV across the first and second mortgage is capped by Bank of Israel regulations at the same levels as for new purchases, generally 75 percent for owner-occupiers. The second mortgage carries a higher interest rate than the first mortgage because the lender is in a subordinate position. Equity release is commonly used in Israel for home renovation, investment in another property as a down payment, or large personal expenditures. Some banks also offer a revolving equity line similar to a home equity line of credit, where you can draw down and repay up to a set limit without refinancing the full mortgage each time.
How does property appreciation affect home equity in Israel?
Property appreciation is the primary driver of equity growth for many Israeli homeowners, particularly in the first 10 years of a mortgage when principal repayment is relatively slow. Israeli residential property prices rose significantly from 2007 to 2022, with the CBS housing price index approximately doubling in real terms in some areas over that period. A homeowner who bought a 2,000,000 ILS apartment in 2014 with a 500,000 ILS down payment and a 1,500,000 ILS mortgage would have seen the property appreciate to perhaps 3,000,000 to 3,500,000 ILS by 2022, building equity far exceeding what the mortgage amortization alone would have generated. However, from 2022 to 2024, rising interest rates dampened transaction volumes and prices in some areas moderated or declined. Future appreciation is uncertain, and equity projections based on past performance should be treated with caution.