As of 2026, per the Pashut Neto calculator, refinancing pays off mostly when market rates have dropped about 0.5%–1% or more below your rate: on a ₪800,000 balance with 18 years left, moving from 5.5% (₪5,843/month) to 4.3% over the same term lowers the payment to ₪5,326 — saving ₪516 a month and about ₪111,478 over the full term, before any early-repayment fee.
How is it calculated?
The calculator compares two tracks on the same principal balance. The monthly payment on each track follows the Spitzer schedule: balance × monthly rate ÷ (1 − (1 + monthly rate)^(−number of months)). The current track uses today's rate and remaining term; the new track uses the new rate, and the new term if entered — otherwise the same term. The total saving is the sum of all payments on the current track minus the sum of all payments on the new track.
In the example: a ₪800,000 balance with 18 years left at 5.5% means a payment of ₪5,843 a month. Refinancing to 4.3% over the same term lowers it to ₪5,326: a saving of ₪516 a month and about ₪111,478 over the term. Important: the early-repayment fee can offset part of the saving — get the exact figure from your bank before deciding; extending the term lowers the monthly payment but adds months of interest and can raise the total cost; refinancing matters most when rates have dropped at least 0.5%–1% below your current rate.
Frequently asked questions
when is refinancing a mortgage worth it
Refinancing matters most when market rates have dropped at least 0.5%–1% below the rate on your current mortgage. In the example: on a ₪800,000 balance over 18 years, dropping from 5.5% to 4.3% saves ₪516 a month and about ₪111,478 in total. Any early-repayment fee must be subtracted from that saving.
how much is the early-repayment fee when refinancing in Israel
There is no single figure — the fee depends on the gap between your mortgage rate and the current average market rate, and on the remaining term, under rules set by the Bank of Israel. The exact amount appears on the payoff statement from your bank, and it can offset a large part of the saving — so compare the total saving against the actual fee.
does extending the mortgage term in a refinance lower the cost
Extending the term lowers the monthly payment but adds months of interest, so the total cost can actually rise — even at a lower rate. The calculator shows both the monthly payment and the total saving, and it says so explicitly when the new track's total payments are higher.
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.
