Analysis from the forthcoming Bank of Israel Annual Report: Heterogeneity in changes in households’ debt burden due to the increase in the Bank of Israel interest rate

 

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• Since the Bank of Israel began raising the interest rate, in April 2022, borrowers living in localities with a high socioeconomic index ranking repaid parts of their mortgage (particularly the portion on the Prime track) more often than mortgage borrowers living in localities with a low socioeconomic index ranking.

 

• In the same period, consumer loan borrowers living in localities with a high socioeconomic index ranking had a greater tendency to avoid taking on new debt and to repay existing debts, while those living in localities with a low socioeconomic index ranking took on additional debt.