Early repayment fee on a multi-track mortgage: Mizrahi Tefahot will pay NIS 5.5 million in a settlement

The details in this article are based on Mizrahi Tefahot Bank's immediate report to the Israel Securities Authority of June 28, 2026, in its English version, and on a report on the Bizportal (Takdin) website of July 6, 2026. We did not have the text of the judgment or of the settlement agreement, and the case number does not appear in the sources. The article is therefore short and limited to what was reported.

Background: class action over the early repayment fee on a multi-track mortgage

According to the bank's report, a motion to certify a class action was filed against it, alleging overcharging of fees on early repayment of housing loans made up of several tracks. The bank first reported the motion on October 7, 2018. Similar motions were also filed against other banks. The bank also referred to the proceeding in Note 10 to its financial statements for March 31, 2026, published on May 19, 2026.

The parties' arguments

According to Bizportal, the applicants argued that the banks allow negative capitalization differences to be offset against the early repayment fee only within the same track, and not across all the tracks of the mortgage. The claim was estimated at NIS 107 million. The banks argued that the order governing early repayment does not treat the loans under the same agreement as a single loan.

What the court decided in the Mizrahi Tefahot settlement

On June 28, 2026, the Tel Aviv District Court gave a judgment approving a settlement in the motion, and also in the motions against other banks on the same matter. According to Bizportal, the settlement was approved by Deputy President Judge Rachel Barkai.

According to the bank's report, Mizrahi Tefahot will pay NIS 5.5 million, by way of a contribution to the Class Actions Fund, as well as an award to the applicant and legal fees to his counsel (the English version of the report does not make clear whether the award and legal fees are included in this amount). It was also agreed that the disclosure the bank gives customers on how the fees are calculated will be updated.

According to Bizportal, Bank Hapoalim will pay NIS 2.7 million and Bank Leumi NIS 1.1 million. The compensation is not paid to customers but is transferred to the fund at the Ministry of Justice. It was also reported that the banks may continue offsetting capitalization differences as they have done until now, and that the court approved NIS 2.1 million in awards and legal fees.

What it means for Mizrahi Tefahot customers

According to the reports, the settlement does not pay money directly to customers and does not change the method of offsetting between tracks. The practical change reported is in the disclosure on how the fee is calculated. Approval of a settlement is not a decision on the claims in the lawsuit.

A borrower planning early repayment of a multi-track mortgage can ask the bank, before repaying, for a breakdown of the fee and of the capitalization differences in each track. More information appears in the article on early repayment at Mizrahi Tefahot and in the rulings database.

Sources

• Mizrahi Tefahot Bank immediate report, June 28, 2026 (in English)
• Bizportal (Takdin), July 6, 2026: article on the approval of the settlement in the mortgage early repayment class actions

Frequently asked questions about court rulings against Mizrahi Tefahot Bank

The full text was not found openly online

How to cite

Not stated in the sources (early repayment class action: multi-track housing loans), Tel Aviv-Jaffa District Court, 28.06.2026. Source: Net HaMishpat (Israeli courts database), case Not stated in the sources (early repayment class action: multi-track housing loans).