Bridge Loan 2026 – Rates and Terms

When buying a new apartment before selling the old one, temporary financing is sometimes required to bridge the gap — until the old apartment is actually sold and releases the capital tied up in it. This is the bridge loan, and here’s how it works in 2026.

Unlike a regular mortgage that is spread over decades, a bridge loan is a short-term loan (usually up to one to two years), designed to provide temporary liquidity until the old property is sold.

How It Works in Practice

The bank provides a loan against the expected value of the old apartment (which has not yet been sold), allowing you to finance the purchase of the new apartment without waiting for the sale. When the old apartment is sold, the proceeds are used to close the bridge loan.

Cost of the Loan — More Expensive than a Regular Mortgage

The bridge loan interest is usually higher than that of a regular mortgage because it is a short-term loan and poses a higher risk to the bank (depending on the actual sale of another property). In 2026, bridge loan rates generally range around 5%-7%, compared to 3.8%-4.5% for a regular mortgage — a significant gap to consider in your budget.

Example Calculation

A bridge loan of 800,000 ₪ for a period of 12 months at an interest rate of 6%: the annual cost (interest only, assuming regular interest payment without principal repayment) is about 48,000 ₪ — a significant cost that needs to be planned for in advance and should not be treated as a "marginal cost" of the move.

Bridge Loan vs. "Alternative Apartment" Path

It is important to distinguish: "Alternative Apartment" (described in the dedicated guide) is a matter of purchase tax — determining which tax bracket you will pay. A bridge loan is a matter of financing — where the actual money for financing the purchase comes from. It is possible (and sometimes necessary) to use both together: to pay purchase tax according to the single apartment brackets in the alternative apartment path, while simultaneously financing the actual purchase through a bridge loan until the old apartment is sold.

What Happens If the Old Apartment Doesn't Sell on Time?

This is the main risk of a bridge loan — if the sale is delayed beyond the loan period, you will need to extend it (at an even higher interest rate), or find alternative financing. It is important to price the old apartment realistically from the outset to avoid getting stuck.

Who is Eligible for a Bridge Loan?

Usually, it is required that the old apartment is already owned by you without significant encumbrances (or with a relatively low mortgage compared to its value), as well as an updated appraisal showing that the expected sale will cover the loan. Banks also check your current repayment ability in case the sale is delayed.

How to Compare Bridge Loan Offers from Different Banks

Beyond the interest rate itself, it is advisable to compare opening fees, flexibility in extending the period if the sale is delayed, and early repayment conditions. Differences of one percent in the bridge loan interest, on a large amount and for a year, can add up to tens of thousands of shekels.

When is it Better to Skip a Bridge Loan Entirely?

If you have flexibility in your schedule — for example, the option to live temporarily with family or in short-term rentals — it may sometimes be more worthwhile to sell the old apartment first and only then look for a new apartment, to completely avoid the high interest cost of the bridge loan.

Frequently Asked Questions

Can you get a bridge loan without a mortgage on the new apartment?
Usually not — a bridge loan is typically combined with a regular mortgage on the new apartment, it does not replace it.

Is there an early repayment fee on a bridge loan?
Generally not, because it is initially intended for a short period and early closure (with the sale of the old apartment) is exactly its purpose.

What is better — a bridge loan or selling first and then buying?
If you are not pressed for time and can live temporarily in a rental, selling before buying saves the high interest cost of the bridge loan — but it depends on personal circumstances and market conditions.

Can you get a bridge loan on a second apartment (investment)?
Yes, but the conditions are stricter and sometimes the maximum LTV is lower than for a bridge loan on a primary residence.

Considering Buying an Apartment or Choosing a Mortgage Mix?

Check out properties for sale in Ma'ale Adumim and Jerusalem, and contact the Merkaz HaNekasim team for personal advice.