Jul 22, 2020

Bank of Israel; extending the mortgage payment freeze program by more time

Early on int he days of Corona, the government put in place allowances for people to be able to push off some loan payments with no penalty. Among the possibilities was the ability to freeze mortgage payments. The plan was that one who felt it necessary, because of Corona and the damage caused to his income, could request it from his bank no questions asked, and it would be approved.

At the time, the delay in payments was set for 3 months. Also, the delay payments would not then mean the loan itself would get extended at the end of it by an additional 3 months. Rather, the 3 months of non-payment would be divided up over the remaining payments due on the loan, making future payments somewhat higher.

According to Globes, the Bank of Israel recently announced that payments for 1 out of every 4 mortgages in Israel was delayed. 1 out of every 5 small businesses in Israel delayed payments of loans under the same plan. And, seeing the necessity of this program, the Bank of Israel has decided to extend this plan further, beyond the 3 months initially set, for an additional 3 months until the end of October.

They are extending the plan because of the second wave of CoronaVirus that we are experiencing (though some insist that it is not a second wave yet but is still; part of the original first wave) that is still threatening to cause major damage to the economy and to many businesses.

Again, this is the ability to push off payments, no questions asked, and it also incurs no fees, but it collect interest on these pushed off payments. A bank rep said that a person requesting the payments be delayed should see this as a new loan being paid on top of the mortgage, and this new loan might have its own fees.

basically, it is not as simple or quite as "free" as you might think. Check with your mortgage bank for details of what you might have to pay when eventually repaying the loans, and decide whether it is necessary or worth it before you just go ahead and take advantage of this.

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