them up to nine percent.

Under the new rates, the bank no longer quotes a two percent administration fee as in the past.

For the first time, borrowers will have the option of fixed rate mortgages and bank officials claim that some borrowers will end up with a better deal. New mortgage fees for variable rates will be at a rate of nine percent. For both fixed and variable rate programmes the bank will begin charging a front end fee of $1,000 for a maximum of 20 years in new mortgages.

A letter from the bank's senior manager, Mr. Richard Gibson, notes that as a result of the removal of the seven (plus two) percent lending ceiling, existing mortgage holders could now face increasing interest rates and an increase in their monthly mortgage payments, as a result of local exposure to pressure from US interest rates.

In effect, the bank can give three months notice to vary the rate of any existing mortgage. Home mortgagors will have to be a little more aware of what their options will be.

Mr. Gibson said: "For those who wish to re-negotiate their existing home mortgage, all of which are currently variable rate mortgages, they could end up paying less. If they are paying 9.0 percent until March 1, they could fix the rate for one year at 8.25 percent, by paying the premium one-off charge of 0.25 percent.'' A new list of choices and rates are being made available. They include the variable rate which has always been available and a one year fixed rate mortgage, which fixes the interest rate for one year at 8.25 percent per annum, together with a one-time premium charge of 0.25 percent at the beginning of the one year period.

For a three year fixed rate mortgage, the rate will be fixed at 8.75 percent for the period, plus an up front 0.5 percent on the balance of the outstanding mortgage amount.

For the five year fixed rate mortgage, the interest rate will be 9 percent per annum, plus an additional one time premium charge of 1.00 percent of the outstanding balance of the mortgage up front.

No matter what programme is chosen, the flat fee of $1,000 for the mortgage is applicable up front.

In each case, at the termination of the prescribed period, the mortgage can be renewed at the variable rate or any one of the fixed rates that are prevailing at the time.

Previously, mortgage rates were set at 9 percent for mortgages over 15 years, 8.75 percent for 10-15 years, 8.5 percent for 5-10 years and 8.25 percent for up to five years.

Butterfield's top five year deposit rate went to 7.25 percent as of December 1. The bank is now offering various deposit products, including a forced savings scheme where customers would put $1,000 on deposit and add a minimum of $250 a month to it.