BOI-consumer reform to increase information transparency for bank customers and to enhance the competitive environment in the mortgage market.

ENPNewswire-November 16, 2021--BOI-consumer reform to increase information transparency for bank customers and to enhance the competitive environment in the mortgage market

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Release date- 14112021 - The Bank of Israel announces the advancement of a series of consumer measures in the mortgage field that are intended to make it easier for borrowers in the process of taking out a mortgage in three areas: making the information more transparent and easier to compare, making the documentation simpler and easier to understand, and making the process more efficient.

As part of the measures, and in addition to the mortgage basket they offer, the banks will be required to provide customers with an initial approval in a uniform format that will present three uniform baskets, the composition of which will be determined by the Bank of Israel, while the length of the loan period will be chosen by the customer.

In each of the baskets, the forecast total interest rate, total forecast payments for the entire period, and the highest monthly payment expected according to the forecast, will be presented.

In addition, the time period for granting the initial approval will be shortened to just a few days, and it will be made possible to submit a request and receive the approval online at all the banks.

As a result of the reform, customers will be able to better understand the terms of the mortgage being offered and the implications of the future payments, make a more informed and easier comparison of various offers from a number of banks, and submit a request for a mortgage offer more rapidly and conveniently. These will also increase customers' power, and thereby enhance the competitive environment in the market.

In order to formulate these measures, the Bank of Israel Governor appointed a special team to consult with a number of world-renowned experts in the fields of mortgages and behavioral economics, officials from the Competition Authority, and others. In addition, and in order to optimize the measures, the Bank used focus groups that were comprised of people from a wide variety of backgrounds.

Bank of Israel Governor Prof. Amir Yaron said, 'We have decided to advance a significant consumer reform that will have a direct impact on all mortgage borrowers in Israel. A mortgage is the largest financial commitment most households will encounter, but mortgage borrowers today are finding it difficult to understand offers or compare them without deep...

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