The fall of the euro against the shekel now places immigrants olim, and European buyers in general, before a difficult challenge. However, currency fluctuations should not prevent you from completing your purchase. Various banking and legal solutions exist to secure your investment in Israel.
1. The euro-indexed loan (Mashkenta)
In Israel, many options exist for mortgage loans offered to purchase an apartment. You can choose to ask your bank or broker toindex the borrowed amount and repayments to the euro. This way, exchange rate fluctuations have less impact and your loan repayments remain perfectly aligned with your income in euros.
2. Borrowing from a European bank
While obtaining a loan in France to finance a property abroad (and primarily in Israel) has become complex, some buyers manage to do so by providing solid guarantees. Furthermore, banking institutions in other countries such as Belgium are sometimes more flexible: it is possible tomortgage a property located in France or Europe to release the funds needed for a purchase in Israel.
3. Borrowing in Israel without spending a single euro (Refinancing)
Do you already own a property in Israel? Under certain strict conditions governed by law, you can obtain refinancing by mortgaging this first property to acquire a second one.
For a rental investment: the monthly loan payments can be covered directly by rental income received in shekels.
If you repay in euros: you only convert small amounts gradually, while waiting for a more favorable euro/shekel exchange rate to consider early repayment.
4. The exchange rate guarantee (Off-plan purchase / VEFA)
If you are buying an apartment off-plan or under construction, the uncertainty related to the exchange rate during future payment calls can weigh heavily on your budget. Financial instruments now exist that allow you to guarantee and lock in the euro/shekel exchange rate at the current rate for the entire duration of the construction project.
