Consolidating Loans into Your Mortgage – One Lower, More Manageable Payment
Updated: October 4, 2026, following the update to Bank of Israel Directive 329.
A car loan, a bank loan, an overdraft that comes back every month, maybe a credit card in installments too – and together they add up to a heavy monthly expense. If you own an apartment, you can sometimes consolidate all your loans into the mortgage and replace several expensive payments with one low, manageable payment.
How does it work?
There are two main ways:
Mortgage refinancing with additional funds – you refinance your existing mortgage and increase it to pay off the other loans.
An all-purpose mortgage – a new loan secured by your apartment, even if there's no mortgage on it. At the banks, since the Bank of Israel updated Directive 329 in February 2026, you can get one for up to 70% of the property's value, provided that the portion above 50% financing does not exceed ₪200,000. Non-bank lenders can go as high as 85% financing – at a higher interest rate. That's why it matters to choose the right lender and the right interest-rate mix.
Why can it pay off?
Lower interest – mortgage interest is usually much lower than the interest on consumer loans and overdrafts.
A longer term – repayment is spread over more years, so the monthly payment goes down.
One payment instead of many – it's easier to manage your budget and plan ahead.
Peace of mind – many families say the relief in their monthly cash flow changed their day-to-day life.
What should you think about first?
The total cost – a longer term can increase the total interest you pay. Compare the total cost, not just the monthly payment.
Additional costs – an appraisal, a file-opening fee, and sometimes an early repayment fee on the existing mortgage.
Don't end up back in the same place – consolidating loans only works if you don't take out new loans afterwards. It's an opportunity to build an orderly budget.
Ability to repay – the bank will check your income and your credit data, exactly as with a regular mortgage.
Who is it right for?
Homeowners with equity in the property, a stable income, and high-interest loans weighing on their monthly budget. If there are problems in your credit data, there are still solutions – read the article Mortgage Declined? What to Do Now and the page on mortgages after a credit rejection.
How do you get started?
The first step is to list all your loans: balance, interest rate, monthly payment and end date. With that list, you can check exactly how much you'll save each month and what it will cost over time. More on the process in the article Mortgage Refinancing – When Is It Worth It and on the Mortgage Refinancing page.
Book an introductory call – we'll review your situation together and build a plan tailored to you.
This article is for general information only and does not constitute personal advice.
