How to choose an optimal mortgage mix? Tips for mortgage advisors

As mortgage advisors, the mix is the heart of the deal. The interest rate is important, but what determines the quality of the advice is the degree of fit between the mix and the client: income profile, risk level, holding horizon, and future plans.

In this post, you will receive a clear framework for building mixes, including principles, examples, and recommended mixes according to client type.

5 principles for building a successful mortgage mix

1. Know the client in depth

Before starting to play with interest rates, one must understand who the client is:

Key questions:

• What is the net income, and how stable is it?
• Are there expected changes in income in the next 3–7 years? (Promotion, going back to school, expanding the family)
• What is the holding horizon for the apartment? (Long-term residential apartment, temporary apartment, investment apartment)
• Is there expected early repayment partial/full? (Inheritance, study fund, sale of another asset)
• What is the level of risk the client is willing to take? (How sensitive is he to changes in the monthly payment)

The goal: to translate the answers into mix policy – how much stability is needed, how much flexibility, and how much can be "gambled" on variable tracks.

2. Adhere to the third rule of the Bank of Israel

The third rule is a regulatory framework, but also a professional working tool:

• At least one third at a fixed rate (linked or unlinked)
• No more than two thirds in variable tracks
• No more than one third in index-linked tracks

For the advisor, this rule is a starting point. Within this framework, you choose:

• How much of the fixed will be unlinked (maximum stability)
• How much of the variable will be linked (index risk) and how much unlinked
• How much of the prime to utilize, according to the level of risk the client is willing to take

3. Build scenarios – not just one mix

A professional advisor does not present the client with just one mix, but 3–4 scenarios at different risk levels:

1. Optimistic scenario – low interest rates, moderate index, early repayment occurs as planned.
2. Conservative scenario – slightly higher interest rates, slightly higher index, partial early repayment.
3. Aggressive scenario – more prime/variable, lower initial repayment, but high sensitivity to changes.
4. Extreme scenario – what happens if:

• the interest rate rises by 2%?
• the index rises by 4% per year?

Presenting the scenarios to the client allows him to choose consciously the level of risk, and not just sign a mix he doesn't understand.

4. Follow "cost per shekel" – the professional index

Beyond the monthly repayment, the most important index for comparing mixes is:

Cost per shekel = how many shekels the client pays in total for every shekel he borrows.

For example:

• Mix A – total cost 1.45 NIS for every 1 NIS loan
• Mix B – total cost 1.65 NIS for every 1 NIS loan

Two mixes may seem similar in monthly repayment, but the gap in total cost is huge over the years.

The lower the cost per shekel – the more efficient the mix. Usually, a good mix will range around 1.45–1.55 (depending on the period, interest rates, risk profile).

5. Use an advanced mortgage calculator

A professional mortgage advisor does not work with just basic Excel. An advanced mortgage calculator is required that allows:

• Comparison of mixes side by side
• Simulation of interest/index rise
• Automatic calculation of cost per shekel
• Presentation of clear graphs to the client (debt development, monthly repayment, interest component vs. principal)

The calculator is not just a calculation tool – it is a marketing tool that illustrates to the client your professional value.

Recommended mixes according to client profile

Important: The examples below are just a framework for thinking. Always tailor to the specific client, market interest rates, and bank policy.

1. Young couple – first apartment

Typical characteristics:

• Medium income, expected increase in the coming years
• High sensitivity to monthly repayment
• Long holding horizon

Proposed mix example:

• 33% fixed (recommended to consider an unlinked part for stability)
• 33% prime
• 34% variable every 5 years

Professional logic:

• The fixed provides a stable anchor for the monthly repayment.
• The prime and variable allow for flexibility in early repayment and possible utilization of low interest rates.
• Diversification between tracks reduces concentrated risk.

2. Established family – investment apartment

Typical characteristics:

• High and stable income
• Second/third apartment
• Goal: Minimum cost, maximum return

Proposed mix example:

• 40% fixed
• 30% index-linked
• 30% prime

Professional logic:

• The period is usually shorter, so more index-linked can be taken to enjoy a low interest rate.The high income allows for absorption of some volatility.
• The emphasis is on
• low total cost and not just on absolute stability.3. Investor expecting early repayment

Typical characteristics:

Clear expectation of large money in 3–7 years (sale of asset, study fund, exit)

• Willing to take more risk in the short term
• Proposed mix example:

40% prime

• 30% variable
• 30% fixed
• Professional logic:

Prime and variable tracks allow for

• flexible and cheaper early repayment.The fixed provides a stable base in case the repayment is delayed or not fully executed.
• The emphasis is on
• flexibility and not just on initial monthly repayment.Checklist for mortgage advisors

Before you finalize a mix and submit it to the client, go through the following checklist:

✅ The mix adheres to the third rule of the Bank of Israel.

1. ✅ At least 3 scenarios (optimistic, conservative, extreme) have been built and presented to the client.
2. ✅ Cost per shekel has been checked – aiming to be
3. below 1.55 (subject to market and risk profile).✅ The client received a clear explanation of each track, understood the risks, and approved the mix in writing.
4. You can add a signature section to the advisory form where the client confirms that he understood:

that the monthly repayment may change in variable tracks

• the meaning of index-linked
• the meaning of early repayment
• Summary – the mix is the art of the advisor

Building an optimal mortgage mix is a combination of

technical knowledge, understanding of regulation, risk analysis, and human acquaintance with the client.To stand out as professional advisors:

Use advanced tools for calculating and comparing mixes

• Invest in the characterization stage – this is the most important stage
• Present scenarios to the client, not just one number
• Measure yourself by
• cost per shekel and not just by "I got interest X"This way you will turn the mix from a technical tool into a real competitive advantage in your mortgage consulting.

כך תהפכו את התמהיל מכלי טכני ליתרון תחרותי אמיתי בייעוץ המשכנתאות שלכם.

{
  "loanAmount": 1000000,
  "scenario": "שמרני",
  "mix": [
    { "type": "קבועה_לא_צמודה", "share": 0.33, "rate": 4.2 },
    { "type": "פריים", "share": 0.33, "rate": 1.6 },
    { "type": "משתנה_כל_5", "share": 0.34, "rate": 3.1 }
  ],
  "metrics": {
    "monthlyPaymentStart": 5200,
    "totalPaid": 1520000,
    "costPerShekel": 1.52
  }
}