Israel's Finance Ministry is working on a plan to help first-time home buyers cope with surging property prices by enabling them to raise mortgages for up to 90% of the value of the property they are purchasing.
The ministry plans to allow young couples to borrow up to 90% of the value of homes valued at up to 1.3 million shekels ($363,000).
The Bank of Israel set a cap of 75% earlier this decade to slow price rises, but property values have continued to rise.
The ministry did not provide any further details on its plan to raise the cap to 90%. According to Israeli media reports, the government would have to provide funding or guarantees for loans above 75%.
Near-zero interest rates have made housing a top investment in Israel. Israel's home prices have more than doubled in the past decade to an average of about NIS 1.5 million ($420,000).
Apartments in Tel Aviv cost more than NIS 2 million ($560,000) on average and in Jerusalem cost NIS 1.9 million ($530,000).
A Bank of Israel spokesman said the government had not approached the bank with a plan to raise the mortgage cap and declined to comment further.
Finance Minister Moshe Kahlon, who campaigned in the 2015 election on reducing house prices, has sought to make it simpler to obtain permits to build new homes, offered developers discounts on buying land and provided subsidies for some new building projects.
In March, the central bank said the subsidies had created a two-tier system, with some benefitting from assistance and others struggling to afford homes at free market prices.
Housing starts in Israel fell to 49,660 in 2017 from 55,622 the previous year. In the second quarter of 2018, there were 11,228 starts, compared with 12,798 a year earlier.
