Butterfield Bank is to automatically defer all residential mortgage and personal loan payments for the next three months to help customers through financial difficulties caused by the Covid-19 crisis.

The bank will also introduce a payment deferral on credit cards for April and May, meaning customers can skip their next two monthly payments without incurring any late fees.

In a statement, the bank said: “Butterfield will introduce a three-month automatic payment deferral programme on all residential mortgages and personal loans in good standing, meaning customers will not be making principal and interest payments for the next three months and any penalties will be waived.

“This will assist customers who may be facing lower incomes or cash inflow at this time.”

Butterfield added that business customers with a remaining loan principal of up to $2 million who are facing difficulties can pay interest only on their next three monthly loan payments with no penalties.

“Business and corporate clients with loan values greater than $2 million who wish to discuss credit and payment arrangements should contact their relationship managers, as these arrangements are typically more complex,” the bank added.

Michael Neff, Butterfield’s managing director, Bermuda, said: “The impact of the Covid-19 crisis on tourism and hospitality, and its knock-on effect on employment has been sudden and significant.

“We understand that the situation will make it difficult for some of our customers to service their outstanding debts. To make things easier for families and businesses, and to help the local economy recover more quickly post-crisis, Butterfield is taking these urgent, substantive steps to ease the financial pressures on customers in Bermuda.

“We are working as quickly as possible to implement these changes, and we are here to support our customers throughout this crisis and beyond. We encourage anyone facing financial challenges to reach out to us so we can work on solutions together. We will continue to review these initiatives and will provide timely updates to customers.”

Customers covered by these arrangements should understand that interest on the outstanding balance at the contractual interest rate, payable during the payment deferral period [where no loan or interest payments are being made] will be added to the outstanding principal and will result in extension of loan terms.

Therefore, the total amount of interest paid over the lifetime of the loan will increase as a result of payment deferral.

Those customers who wish to maintain their current payment schedules and amounts are asked to contact their relationship managers or the bank’s consumer credit department on 298-4799.