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There is little competition between commercial and mortgage banks in real estate financing. New players to the market of real estate finance are insurance companies and pension funds.
Commercial property financing is usually at a Debt/Equity ratio of 70/30 to 80/20. The banks are limited in total lending for income producing properties, and thus try to lower the D/E ratio on such deals or alternatively raise interest rates. Bank of Israel regulations limit the ability to leverage properties for further real estate investments.
Shekel-Fixed Rate or Fluctuating Rate: since most income on property is in shekels and linked to the inflation index it is recommended to borrow in shekels. Shekel loans are generally indexed to inflation.
Foreign Currency Linked: these mortgages can only be set up to 7-10 years. Banks tend not to fix foreign currency interest rates beyond this period.
All mortgages require a registered lien in the land registry and often personal guarantees of the signatures. Non recourse financing can sometimes be negotiated.


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