Banks Report Tougher Loan Pricing for Construction and Large Businesses

A Bank of Israel survey released Thursday found tougher loan spreads for construction, real estate and large businesses in the third quarter of 2026. Business-credit demand continued to weaken, and banks expected demand from construction and real-estate borrowers to decline further in the fourth quarter. Spreads eased on lower-risk loans to micro, small and medium businesses. Household demand for mortgages and consumer credit was unchanged, while banks expected mortgage demand to increase next quarter. Mortgage spreads remained steady, and competition helped ease lower-risk consumer-loan spreads; the findings describe banks’ survey responses and expectations rather than changes in actual lending volumes.