29.12.2009 Uncategorized No Comments

Interest rates up Again!

Last night Governor of the Bank of Israel Stanley Fischer put interest rates up by 0.25 basis points to 1.25%. This is the second month in a row that he has put interest rates up.

Whilst this wasn’t a surprise, some analysts thought interest rates would stay on hold this month and go up next month. Inflation issues is the reason given for the rate hike. Inflation in Israel over the last 12 months is currently at 3.8%, well above the government target of 1-3%. Raising the interest rates helps to bring inflation under control.

I would expect interest rates to rise substantially over the next 12 months, even as high as 3.5% in my opinion.

If you are looking to get a mortgage in the next 12 months,  I think your monthly payments will rise the later in the year you take the mortgage.

Happy New Year.

DE

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