The prime interest rate is an interest rate published by the Bank of Israel plus 1.5%. This interest rate decreased greatly in the previous years and then returned and increased greatly and is expected to change in each period. The prime route is very popular in periods of low variable interest rates, but embodies a significant risk in a period of rising interest rates.
A prime route loan is an interest rate that changes according to the change in the interest rate published by the Bank of Israel once a month plus the bank's margin and it is not linked to the consumer price index. According to the instructions of the Bank of Israel, up to two-thirds of the total loan can be received in this route at variable interest rates. These conditions can change all the time.
In the low interest rate environment, many take advantage of this route, also because there are no exit fines. However, it should be taken into account that the Bank of Israel interest rate may also increase and cause an increase in the monthly repayment.