Financing and Credit for Purchasing Real Estate Abroad 2026 | Property Center

Financing the purchase of real estate abroad is significantly different from financing in Israel — both in terms of available options and considerations to take into account.

Local Financing in the Target Country

Some countries offer bank financing to foreigners, but usually under stricter conditions and higher interest rates than those offered to local residents (see for example the mortgage guide in Azerbaijan).

Mortgage Recycling on a Property in Israel

A common option among Israeli investors is recycling the existing mortgage on a property in Israel to raise equity for a purchase abroad — a solution that can be simpler than dealing with a foreign banking system.

Financing from the Developer (Off-Plan)

In new projects, many developers offer payment plans spread over the construction period — an alternative that does not require any banking involvement.

Source of Financing	Main Advantage	Main Disadvantage
Local Bank in the Target Country	Does not require liquidity from Israel	Stricter conditions for foreigners
Mortgage Recycling in Israel	Familiar and relatively simple	Leverages an existing property in Israel
Financing from the Developer (off-plan)	Flexibility, no banking involvement	Depends on the developer's adherence to timelines
Full Equity	Maximum simplicity, no debt	Requires high liquidity

Currency Considerations in Financing

It is important to pay attention to the currency in which the financing is taken compared to the currency in which rental income is received — a gap between the two creates additional exposure to exchange rate fluctuations beyond the basic exposure of the property itself.

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Common Misconceptions

A common misconception is that purchasing with full equity is always "the safest choice" — while it does reduce financial risk, it also concentrates a lot of capital in a single asset, which can be a diversification risk in itself.

Frequently Asked Questions

What financing option is most common among Israeli investors?

Recycling a mortgage on an existing property in Israel is probably the most common option, due to its relative simplicity compared to a foreign banking system.

Is financing from the developer (off-plan) safe?

This largely depends on the reputation and reliability of the developer — it is advisable to check this as part of the due diligence before signing any payment plan.

Which is better from a tax perspective — equity or debt financing?

The tax implications vary depending on the specific case — it is advisable to consult with an accountant before making a decision on the financing structure.

The Next Step

The Property Center accompanies Israeli investors in real estate investments abroad, including in Azerbaijan. Contact us for a no-obligation consultation call.