The Bank of Bermuda yesterday said it was introducing fixed interest rate mortgages for the first time, but it's not the first time fixed-rate terms have been available to mortgage-seeking property buyers.

First to bring fixed-rate mortgages to market was Butterfield Bank in 1997. However, this development means that both banks now offer fixed rates for either two-year or five-year terms.

Once that term expires, the mortgage holder can renegotiate for a new fixed rate or migrate to a variable rate for the remaining loan period.

The Bank of Bermuda said yesterday that its fixed rate mortgages - which are available to those signing on for 85 percent and 95 percent mortgages - could lock in interest rates as low as 7.75 percent for the multi-year term.

The fixed interest rate was said to apply to loans spread over ten to 30 year periods. However, that 7.75 percent fixed rate compares to variable rate mortgages (for financing up to 85 percent) with interest rates as low as 6.5 percent, said a bank spokesperson.

Butterfield declined to say what range of fixed-term rates they offer, with a spokesperson saying “we market straight to the customer”.

Meanwhile, Bank of Bermuda head of banking services Michael Collins said the fixed-rate offering was the direct result of customer demand. “With global interest rates showing signs of moving upward, albeit slightly, it is not surprising that some of our customers would like to ‘lock in' the favourable rates currently being offered here at the bank. Additionally, some households find that a fixed monthly mortgage term helps them manage their expenses,” Mr. Collins said.