In Pashut Neto's 2026 buy-vs-rent calculator, for a ₪2,000,000 apartment with ₪500,000 equity, a 5% mortgage (mashkanta) over 25 years and rent of ₪5,000 a month, the buyer ends with about ₪4.19 million and the renter-investor with about ₪5.92 million — a gap of about ₪1.73 million in favor of renting, under the model's assumptions of 3% annual home appreciation and a 7% annual alternative return.
How is it calculated?
The buyer's side: the calculator assumes a Spitzer (standard Israeli amortized) mortgage on the difference between the price and the equity, and 3% annual home appreciation. In the example — a ₪2,000,000 apartment with ₪500,000 equity and a ₪1,500,000 mortgage at 5% over 25 years — the home is worth about ₪4.19 million at the end of the term, fully owned once the mortgage is paid off.
The renter's side: the equity (₪500,000 in the example) is invested at an assumed 7% annual return, and each month the difference between the mortgage payment and the rent (₪5,000, held flat for the whole term) is invested as well. The renter-investor ends with about ₪5.92 million — a gap of about ₪1.73 million in favor of renting in this scenario. The model excludes purchase tax, maintenance and rent increases, and past returns do not guarantee future returns.
Frequently asked questions
Is it better to buy or rent an apartment in Israel in 2026?
The result depends on the assumptions. In the calculator's example — a ₪2,000,000 apartment, ₪500,000 equity, a 5% mortgage over 25 years and ₪5,000 rent — the renter-investor ends with about ₪5.92 million versus about ₪4.19 million for the buyer, a gap of about ₪1.73 million. A different rate, return or appreciation pace changes the outcome.
What assumptions does the buy vs rent calculator use?
The model assumes 3% annual home appreciation, a 7% annual alternative return on the money not put into the apartment, and flat rent. It excludes purchase tax, maintenance costs and rent increases. Past returns do not guarantee future returns.
How much equity do you need to buy a single home in Israel?
A single (only) home requires equity of at least 25% of the price. In the calculator's example the equity is ₪500,000 out of ₪2,000,000 — exactly 25%.
This calculation is a general estimate for illustration only. It does not constitute tax, pension, or investment advice, nor a substitute for personal advice from a licensed professional, and should not be relied on for decisions.
