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Mashkanta Refinancing: How to Efficiently Recalculate Your Mortgage in

Learn how mortgage refinancing (mikhzur) helps save hundreds of thousands of shekels. Expert guidance and loan condition audits in Israel from IsraRealty.

Viola Goldberg

March 7, 2026
5 min reading time

Mashkanta Refinancing: How to Efficiently Recalculate Your Mortgage in

Mashkanta Refinancing: When Should You Recalculate Your Mortgage?

Published: May 24, 2026 | Updated: October 18, 2026

IsraRealty Team Real Estate Market Analysis Department

Refinancing (mikhzur) a mashkanta is advisable when market rates decrease by 0.5-1% or when there are changes in the consumer price index. This can reduce overpayments by over ₪100,000 and optimize the monthly payment based on the borrower's current financial situation.

Mikhzur allows you to lower interest rates or change the loan term to reduce total overpayment.
The main criterion for benefit is the difference between the current rate in your contract and current market conditions.
Early repayment of an old mashkanta may incur a bank penalty, which must be factored into savings calculations.
Refinancing is possible both within your current bank and by switching to another bank to obtain better terms.

What is a mashkanta mikhzur and how does it work?

Mikhzur (from Hebrew "recycling") is the process of closing your current mortgage loan and opening a new one under more favorable terms. In Israel, a mashkanta often consists of several "tracks" (maslulim), each with its own rate and linkage to the price index (Madad) or the Prime rate.

Refinancing allows you to revise the structure of your mortgage portfolio. For example, if inflation was low when you took out the loan but is now rising, it makes sense to consider moving away from index-linked tracks in favor of fixed rates.

When does refinancing become profitable?

Interest savings is the main goal of mikhzur. Experts recommend reviewing your mortgage terms every 2–3 years. There are several scenarios where recalculation will yield real profit:

Decrease in market rates: If the bank offers a rate lower than the one you originally took.
Change in personal income: If your salary has increased, you can shorten the mashkanta term, drastically reducing the total overpayment.
High inflation: If a significant portion of your debt is tied to the price index, the remaining debt may be growing faster than you are paying it off.
Receiving a large sum: For example, an inheritance or maturing Keren Hishtalmut funds allow you to pay off part of the debt and renegotiate terms for the remainder.

Types of refinancing: internal and external

Borrowers can choose between two ways to conduct the procedure:

Internal mikhzur: Revising terms within the same bank where the mashkanta is held. This is faster and cheaper in terms of paperwork, but the bank may not offer the lowest possible rate, knowing the client is unlikely to leave.
External mikhzur: Moving the mortgage to another bank. This requires a new property appraisal (shamaut) and a Tabu extract, but allows you to negotiate for the best terms on the market.

Table: Internal vs External Mikhzur
Parameter	Internal (Current Bank)	External (Switching Banks)
Processing speed	High (up to 2 weeks)	Medium (1–2 months)
Processing costs	Minimal	Requires appraisal (shamai) and registration
Rate reduction potential	Limited by bank policy	High due to competition
Legal verification	Not required again	Up-to-date Tabu extract required

Even a small rate reduction of 0.5% can save you tens of thousands of shekels. IsraRealty specialists will help you audit your mortgage portfolio and choose the optimal refinancing strategy.

Early repayment penalty (Amlat Piraon Mukdam)

The most important nuance during mikhzur is the early repayment penalty. The bank charges this if the current market rate is lower than the one stipulated in your contract. In this way, the bank compensates for its lost profit.

Before making a decision, you must request a document from the bank called a "Doach Itraot" (balance report). It will show the debt amount and the exact penalty size. If the interest savings are higher than the penalty, refinancing remains profitable.

Frequently Asked Questions

Do I have to pay a penalty for refinancing on a "Prime" track?

As a rule, there is no early repayment penalty for tracks tied to the Prime rate, or it is minimal (a technical fee). This makes this component of the mashkanta the most flexible for changes.

Can I do a mikhzur if I bought a new apartment?

Yes, refinancing is possible for new apartments as well, although the procedure may be more complex if the property is not yet registered in the Tabu and is still in the construction support stage.

How many times can I refinance?

There are no legal restrictions on the number of mikhzur procedures. You can recalculate your mortgage whenever market conditions become significantly more favorable than your current ones.

Does my credit score affect mikhzur terms?

Yes, when switching to another bank, your credit score (BDI) will be checked again. A good payment history on your current mashkanta will help you get a lower rate.

What is a "mashkanta basket"?

This is the distribution of the loan amount across different tracks (fixed, variable, index-linked, or prime-linked). The goal of refinancing is to build a basket that minimizes inflation risks and total overpayment.

Want to know exactly how much you can save on your mortgage? We will conduct an in-depth analysis of your loan and prepare a calculation of the potential savings from refinancing.

Get a consultation

Conclusion

Refinancing a mashkanta in Israel is not just a way to lower your monthly payment, but a powerful personal finance management tool. Given market volatility and inflationary risks, a passive stance could cost a borrower hundreds of thousands of shekels. Timely analysis of your mortgage portfolio and expert advice will help turn a long-term burden into an efficient financial plan.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Loan conditions depend on the individual borrower's parameters and bank policies.

Last updated: October 18, 2026

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