Variable Index Linked Loan is a loan linked to the CPI. In addition the interest rate changes every pre-determined period of time, for example once a year, or once in 5 years etc.
The interest rate in this type of loan is constant during the periods, but it is always updated according to the CPI. Therefore provides Relative stability during any period. The interest rate changes at pre-determined intervals (usually five years) and therefore can cause an increase in the monthly payments if the interest rates will rise, only from the date of change and thereafter.
The interest rate is relatively low fixed interest rate. You can reduce exit penalties as approaching to the end of the pre-determined period.
The disadvantage is the exposure to rising interest rates during the exit station which would increase the monthly payments and changes in the CPI. However, keep in mind that the change will apply to interest only and therefore the increase will be moderate.
According to the Bank of Israel, all the loans that change will not constitute more than two third of the total loan.