Bank of Israel Governor Stanley Fischer responded Tuesday to accusations that a new rule according to which only 33% of a mortgage loan can be a floating interest rate loan will hurt young couples. Members of Knesset had argued that the rule would make mortgages more expensive, making it even more difficult for couples to buy a first home.
The new rule will protect buyers by decreasing the amount of risk they take on, said Fischer, who also warned that if just 0.5% of buyers were no longer able to meet their mortgage payments it could lead to a national economic crisis.
Israel must solve the housing crisis by building more homes, not allowing risky loans, he said. He proposed taking steps to speed the process of making land available for the construction of new housing.
The new rule will protect buyers by decreasing the amount of risk they take on, said Fischer, who also warned that if just 0.5% of buyers were no longer able to meet their mortgage payments it could lead to a national economic crisis.
Israel must solve the housing crisis by building more homes, not allowing risky loans, he said. He proposed taking steps to speed the process of making land available for the construction of new housing.