Israel interest rate stays at 3.25% in October 2026
The Bank of Israel held its policy rate at 3.25% on 21 October, with home prices down 1.8% over the year while rents on new tenancies rose 5.3%.
The facts
- The Monetary Committee of the Bank of Israel decided on 21 October 2026 to keep the interest rate unchanged at 3.25%.
- The bank reported that home prices fell by 0.6 percent in July-August and by 1.8 percent in the past year.
- The annual increase in the housing component of the Consumer Price Index remained unchanged in September, at 3.8 percent.
- Renewing rental contracts rose at an annual rate of 2.4 percent, while the rate for contracts with a change of tenant increased to 5.3 percent.
- New mortgage borrowing totalled about NIS 10.3 billion in September in seasonally adjusted terms.
- Building permits and housing completions are at high levels, the stock of unsold homes is stable and remains high, and the seasonally adjusted volume of housing transactions moderated in July-August.
What it means for your money
- Entry prices are easing while rents on new tenancies climb, so the yield improves. But financing costs are parked, not falling.
- Glopra's data puts the average Israeli dwelling at $784,927 and the average monthly rent at $1,608, which is the base the 5.3 percent new-tenancy figure has to work on.
- If you already let there, the spread between 2.4 percent on renewals and 5.3 percent on new tenancies is the practical lever: income moves mainly at tenant turnover, not at renewal.
What to watch
- The stock of unsold homes is the supply overhang to track: it is stable and high while permits and completions both stay elevated.
- These price figures are the central bank's reading of the market; the Central Bureau of Statistics publishes the dwellings price index separately, on its own schedule.
Sources: Bank of Israel https://www.boi.org.il/en/communication-and-publications/press-releases/21-10-26ben/