Butterfield Bank Offers 100 Percent Mortgage Financing To Qualifying First-Time Home Buyers

Hamilton, Bermuda, January 23, 2007 -Butterfield Bank (NTB.BH) announced today that it will extend 100% mortgage financing, to a maximum of $1 million, to qualifying first-time home buyers.

First-time buyers can now borrow up to $1 million on a thirty-year term at a highly competitive fixed interest rate of just 6.95% for three years. 

"Anyone who is contemplating the purchase of a home in Bermuda is acutely aware of how much housing prices have increased over the last couple of years," said Eddie Belfon, Vice President of Consumer Credit at Butterfield Bank. "We are introducing 100% financing at rates that were previously available only to those with a five percent down payment to keep step with the changing realities of the Bermuda marketplace."

Qualifying borrowers who obtain 100% financing on a million-dollar property would pay $6,619 (including principal payments) each month, based on a 30-year term and an annual interest rate of 6.95%.  This is $175 lower than interest-only monthly payments of $6,794 available at 8% in the market. 

A key difference between Butterfield Bank's 100% financing solution for new homebuyers and competitors' products is how quickly borrowers begin to pay down the principal on their homes.  "With our offer, homeowners begin repaying a portion of the mortgage principal with their first monthly payment.  With competing products, consumers pay only interest for up to three years," said Mr. Belfon, adding, "That's an important distinction.  It means that home buyers who borrow from Butterfield Bank will begin building equity faster, and will actually own their home sooner."

In response to interest-only mortgage products that were recently introduced on the Island, Mr. Belfon said, "We're steering clear of introducing any off-the-shelf products of that nature.  We're interested in helping homeowners actually own their homes, rather than simply pay the Bank for years and have no equity to show for it."

The Bank encourages first-time buyers and homeowners who are renewing their mortgages to visit a Butterfield Bank branch or call the Bank's mortgage hotline - 298-4799 - to discuss the financing options that are available.  "In our view, a mortgage should be a customised product, not a standardised one," said Mr. Belfon.  "When it comes to home financing, we sit down with each of our potential customers to provide a solution that works with their unique needs and circumstances - one that features affordable monthly payments and competitive interest rates, and gives them access to the benefits of actual ownership sooner."