The government is set to debate today (Tuesday) a proposed assistance law aimed at easing the burden on mortgage holders whose monthly payments have surged amid rising interest rates.
According to the plan, first reported by Kan News and spearheaded by the National Economic Council under Prof. Avi Simhon, eligible households would receive an average monthly grant of about NIS 500 over a five-year period. The overall cost is expected to reach billions of shekels.
However, a sharply critical legal opinion submitted Adv. Avital Sompolinsky to Deputy Prime Minister Yariv Levin and Government Secretary Yossi Fuchs raises significant objections, both legal and professional.
The opinion argues that the proposal is fundamentally flawed, describing it as “arbitrary to the point of violating equality." At the heart of the criticism is the bill’s selective eligibility: assistance would be granted only to borrowers with variable-rate mortgages considered higher risk, while those who chose more stable fixed-rate tracks, often at higher cost, or who refinanced to reduce exposure, would receive no support.
“It is proposed to extend eligibility even to borrowers who knowingly took mortgages when interest rates were already high," the document notes. It further criticizes the plan for ignoring other affected groups, including renters facing rising housing costs and individuals forced to rely on consumer loans to purchase homes due to registration barriers.
Professional discussions cited in the document also challenge the necessity of the program. Representatives from the Bank of Israel and the Finance Ministry pointed out that although average mortgage repayments increased by roughly NIS 960, the average wage per person rose by about NIS 1,880 during the same period. “Assessing the impact of interest-rate hikes without factoring in growth in disposable income is a professional error," officials argued.
Another major concern relates to funding. The legal opinion stresses that the bill cannot move forward without identifying a clear budgetary source, including offsetting cuts elsewhere as required by law. Vague commitments to determine funding at a later stage are deemed insufficient.
The proposal’s implementation mechanism also drew criticism. Instead of direct government distribution, banks would be tasked with determining eligibility and disbursing the grants. According to the legal adviser, the bill lacks adequate provisions for oversight, supervision, or enforcement regarding how these private institutions would manage public funds.
Sompolinsky concludes that advancing the legislation through an expedited process while bypassing thorough review by the Finance Ministry and the Bank of Israel constitutes an improper legislative approach. “The drafting process was effectively halted when it was decided to fast-track the bill without completing a full professional assessment," she writes.