First-Time Home Buyer Guide: Everything You Need to Know

Buying your first home is exciting, but the mortgage process can feel overwhelming. Here is a step-by-step guide to navigate it with confidence.

Step 1: Know Your Budget

Before you start looking at apartments, understand how much you can borrow. Banks in Israel typically finance up to 75% of the property value for first-time buyers (up to 70% for others). You will need at least 25% equity.

Step 2: Check Your Eligibility

Your repayment capacity is calculated based on your monthly income and existing obligations. Generally, your monthly mortgage payment should not exceed 30-40% of your net monthly income.

Step 3: Get Pre-Approved

A pre-approval ("ishur ekroni") from the bank gives you a clear picture of your budget and shows sellers you are a serious buyer. This is a non-binding estimate.

Step 4: Understand All Costs

Beyond the property price, budget for:

Purchase tax (mas rehisha): 0-10% depending on property value

Attorney fees: 5,000-15,000 ₪

Appraisal fee: 1,500-3,000 ₪

Bank arrangement fees: 0.25-0.5% of the loan

Property tax (arnona) and maintenance fund deposits

Step 5: Choose Your Mortgage Mix Wisely

This is where professional advice pays for itself. A well-structured mix can save you hundreds of thousands of shekels. Do not just accept the bank's first offer — negotiate.

Step 6: Close the Deal

Once you sign the contract, the bank transfers the money, and you get the keys. Mazal Tov!