If you’re considering a mortgage or loan in Israel, you’ve probably heard about the prime rate. It’s one of the most important numbers in Israeli finance.
This guide gives you everything you need to know about Israel’s prime rate: today’s rate, how it’s set, its future, and most importantly how it affects your mortgage.
What Is Today’s Prime Rate in Israel?
As of September 2026, Israel’s prime rate is 4.75%.
The rate has dropped for the fifth time in ten months, taking us to rates we haven’t seen since November 2022.
What Is the Prime Rate in Israel?
The prime rate in Israel is the Bank of Israel’s base interest rate plus 1.5%.
For example, if the BOI base rate is 4.5%, the prime rate is 6.0%.
Banks use the prime rate as the foundation for many loans including mortgages.
Source: Bank of Israel, Taking a Loan
Who Sets the Prime Rate and How Is It Determined?
The Bank of Israel’s Monetary Committee sets the base interest rate to influence inflation, growth, and the strength of the shekel.
Because the prime rate is customarily 1.5% above the base rate, it moves automatically when the base rate changes.
Future Bank of Israel Interest Rate Announcements
The Bank of Israel announces rate decisions at 16:00. Upcoming announcements are scheduled to be made on:
- 21 October 2026
- 23 November 2026
- 4 January 2027
- 22 February 2027
- 5 April 2027
- 24 May 2027
- 5 July 2027
- 18 August 2027
- 27 September 2027
- 22 November 2027
- 3 January 2028
- 21 February 2028
- 3 April 2028
The prime rate can change up to eight times per year in Israel. Rate announcements are made in:
- January
- February
- April
- May
- July / August
- August / September
- October
- November
Prime Rate and Mortgages in Israel
If a portion of your mortgage is linked to prime, payments for that portion increase or decrease whenever the rate changes – usually as soon as your next payment.
Fixed loans are unaffected. If you have an adjustable-rate or inflation-linked loan, your loan may be affected indirectly.
Want to learn more about what makes rates rise or fall? Read What Drives Interest Rates in Israel.
Is It a Good Time to Refinance If the Prime Rate Drops?
If rates have dropped 0.5% or more since you took out your loan, it could mean that your mortgage is ripe for savings. A refinance often saves hundreds of thousands of shekels over the life of the loan – checking if you could save is free and easy.
Historical Context of Israel’s Prime Rate
To truly grasp today’s prime rate in Israel, it helps to look at how rates have moved over time. Our Prime Rate History in Israel (with Chart & Data Table) article provides an interactive chart, detailed table, and analysis showing trends from 1997 to the present.
Understanding the history behind the numbers can give you an edge. Check out the full historical chart and data table for a deep dive.
Frequently Asked Questions
In effect, the Bank of Israel sets the prime rate.
It’s customarily 1.5% above the Bank of Israel’s interest rate.
It can be. Mortgages must have at least 33% in a fixed track, and prime can be a good option to consider for the balance or part thereof.
Key Takeaways and Next Steps
- Prime rate = Bank of Israel base rate + 1.5%
- It changes whenever the base rate changes
- Directly impacts mortgages and loans in Israel
- Understanding prime can save you thousands over your loan term
Considering a mortgage in Israel? I help clients structure loans with the best rates, that save money, and provide peace of mind.
