Calcalist, Irit Avishar, 15.03.2021

The Commissioner of the Competition Authority, Michal Halperin, marks the mortgage market as an area that is not sufficiently competitive, contrary to its image.

During a discussion in the Economics Committee today (Monday), Halperin said, "We published a comprehensive study in January and the picture that was revealed in it was very disappointing: The mortgage world has an image of a world where there is competition between banks. From him, and the ability of customers to compare bank offers is difficult, burdensome and unrealistic. "

The Economics Committee, chaired by MK Yaakov Margi (Shas), convened a special discussion on the reform of the prime mortgage route. Two months ago, the reform of the Bank of Israel came into force , according to which it is possible to take out a mortgage that is up to two-thirds at prime interest(compared to one-third as it was before).

The prime route is the cheapest in a mortgage, and the expectation was that increasing its component would make borrowers pay off the mortgage. However, preliminary findings from the field indicated that the banks would significantly increase the price of this component. As a result, the Bank of Israel took an unusual step against the banks, threatening that if they did not reduce prices, it would take action against them.

"We insist that the benefit be rolled out to the customer. We collected data on all the approvals in principle given by the mortgage banks since the reform took effect, and we found that the interest rate did fall, but moderately and insufficiently," said Ricky Elias, Deputy Supervisor of Banks at the Bank of Israel. "We are determined to get the situation down more significantly, and we have tools in Arsenal to bring about that."

Nurit Fleter Eitan, director of the Bank of Israel's Communications, Public Relations and Community Relations Department, added: "If we do not see the desired results, we will announce additional steps within a few weeks to bring about this."

MK Yaakov Margi, Chairman of the Economics Committee Photo: Knesset Spokeswoman Adina Velman

At the end of the discussion, Margie said that the Bank of Israel would report to the Economics Committee within a month on the findings of its review, and the steps it intends to take to improve competition in this market.

MK Shlomo Krei (Likud), who worked with the Bank of Israel to promote this relief, visited B.C.RepoHe told the banks: "When the risk passed to the customer, it was expected that the customer would pay less (increasing the prime component, exposing the customer to increasing the payment in the scenario of an increase in interest rates), but the banks used cynically andmonopolyIsti with the power they have in front of the customer, and left the payment as it is, even though the risk has decreased from them. "

Halperin noted that a major problem that the competition authority identifies in the mortgage market is the ability to compare banks' offers: "Each bank offers something different. Then a consumer finds himself comparing apples to oranges. "Apples will be compared to apples. Second, simple basket products need to be produced, so that basic defaults can be understood. This is an essential step to create competition, and it is an important point, and we are working hard to advance our research conclusions," she said.

The CEO of the Association of Banks, Eitan Madmon, said in the committee: "It is impossible and unprofessional to make decisive decisions, so soon after the directive takes effect. After a decade in which the market has been operating in a certain way, it is not possible to seriously examine the conduct of each of the players after a few weeks. The market, banks and customers should be given a few months to adjust, and the Supervisor of Banks should be allowed to examine the data in a professional and reliable manner, and not on the basis of a number of hidden customers. "