Non-Bank Property Finance in Israel
Specialist property finance from lenders outside the traditional Israeli banking system — for complex applications, urgent purchases, bridging and properties that fall outside standard bank criteria.
In addition to mortgages provided by Israeli banks, some borrowers may be able to consider finance from non-bank lenders. Non-bank lenders may include specialist credit providers, insurance companies, institutional lenders, private credit funds and other authorised finance providers.
In Hebrew, non-bank finance is referred to as:
מימון חוץ-בנקאי
Mimun Chutz-Bankai
When Non-Bank Finance May Be Considered
Availability, pricing and lending criteria vary considerably between providers.
Bank Mortgage Versus Non-Bank Finance
Israeli Bank Mortgage
- Longer mortgage terms
- A combination of mortgage tracks
- Bank affordability assessments
- Detailed documentation requirements
- Property valuation by a bank-approved appraiser
- Potentially lower borrowing costs than specialist short-term finance
- A longer underwriting and approval process in some cases
Non-Bank Finance
- More flexible underwriting
- Faster decision-making in some cases
- Greater consideration of the property or proposed exit strategy
- Solutions for complex or unusual applications
- Shorter finance terms
- Higher interest, arrangement fees or other costs
- Additional security or guarantees
- A requirement for a clear repayment or refinancing strategy
Non-bank finance should not automatically be described as better or easier than a bank mortgage. It may be more suitable in certain circumstances, but it may also be more expensive and carry different risks.
Types of Non-Bank Property Finance
Non-Bank Purchase Finance
Finance to support the acquisition of residential property where a standard bank mortgage is unavailable or unsuitable.
Bridge Finance
הלוואת גישור — Halva’at Gishur
Short-term lending used to complete a purchase before longer-term funds or sale proceeds become available.
Finance Against an Existing Property
הלוואה כנגד נכס — Halva’ah Keneged Neches
A loan secured against a property that the borrower already owns. The permitted use, loan amount and lender criteria depend on the provider.
Construction & Renovation Finance
Specialist funding for construction, extensions, significant renovations, property conversions or completion of partially built property. Funds may be released in stages following inspections or valuations.
Short-Term Finance Pending Bank Approval
Temporary finance that may be repaid after the borrower obtains a conventional bank mortgage. This requires a realistic and well-evidenced exit strategy. A future bank mortgage must never be presented as guaranteed.
Finance for Foreign Residents
Some non-bank lenders may consider applicants whose main residence is outside Israel, income is earned overseas, or financial documents are issued in another country. The lender may carry out enhanced identity, source-of-funds and source-of-wealth checks.
Refinancing Non-Bank Finance
Some borrowers use non-bank finance as a temporary solution and later seek to refinance through an Israeli bank. Before arranging short-term finance, the borrower should understand:
- The expected refinancing timeframe
- Whether their income is likely to meet bank criteria
- Any early repayment charges
- Arrangement and legal fees
- Valuation requirements
- The risk that bank refinancing may not be approved
- What will happen if the planned exit is delayed
A future refinance must never be treated as certain.
Non-bank property finance may involve higher interest rates, fees, shorter terms and different security requirements than a conventional bank mortgage. Finance is subject to the lender's approval, valuation, legal checks and individual underwriting. Any proposed exit strategy, including refinancing through an Israeli bank, is not guaranteed. Applicants should obtain independent legal and tax advice before proceeding.
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