One of the first questions foreign buyers ask is: how much cash do I need upfront? This guide explains down payment requirements and strategies to optimize your purchase.
Standard LTV Ratios
Israeli banks typically offer foreign buyers LTV ratios of 50-75%, meaning down payments of 25-50%. The exact ratio depends on your profile and the property.
Factors Affecting Your LTV
Several factors influence the LTV you'll be offered: your residency status (Israeli residents get better terms), income stability and documentation, property type and location, your overall financial profile, and relationship with the bank.
Typical Down Payment Scenarios
For a $500,000 property: at 50% LTV, you'd need $250,000 down; at 60% LTV, you'd need $200,000 down; at 75% LTV, you'd need $125,000 down. Higher LTV ratios typically come with higher interest rates.
Additional Costs to Budget
Beyond the down payment, budget for: purchase tax (varies by buyer status and property value), legal fees (typically 1-2% of purchase price), agent fees if applicable, and appraisal and bank fees.
Strategies to Optimize
Consider these strategies: shop multiple banks for the best LTV, demonstrate strong income documentation, consider properties in areas banks favor, and work with a broker who knows which banks are most flexible.