More and more people are borrowing money for mortgages to buy homes or build onto existing homes. That's a switch from a few years ago when people were borrowing to invest in properties to build new homes for sale or for rent.

Arthur Haycock, President and Chief Executive Officer of Bermuda Home Ltd., said not only has the dollar amount of mortgages granted grown in the past year, but the type of mortgages being granted has changed. The majority of mortgages being granted these days has switched toward people who are buying homes for themselves.

"About 90 percent of our mortgages have been for owner occupancy, either for purchase or for additions to existing homes, with purchases of new homes as the highest amount,'' he said. "A few years ago our investment side was higher. We are seeing a trend towards less investment in purchasing secondary homes or in purchasing homes for rent. The number of mortgages that we granted this year for construction of new homes also fell over previous years.'' The company granted a total of $59 million worth of new or additional mortgages in the financial year ended March 31, a gain of about $4.5 million over the previous year, Mr. Haycock said. He believes that the growth in mortgage activity marks return of confidence in economic and political situation in Bermuda.

Competitor Butterfield Mortgage and Finance is also seeing a similar trend, said Linda Salaam, Deputy Manager of the company.

"There are a lot of first time home owners and not a lot of investment activity,'' she said. "Gone are the days when people could rely on rental income to pay off a mortgage.'' What's interesting, she said, is that many people are getting loans for additions to existing homes.

"A lot of returning college children are investing in their parents property by building additions,'' she said. "We have seen a lot of that in the last 18 months.'' She said the company's mortgage activity from November to April, usually a slow period in the business, has been "pretty consistent'' this year.

Gibbons Deposit Co. has also seen a growth in the amount of mortgages granted for home ownership.

"The residential demand has been enormous,'' said Managing Director James Gibbons. "We are turning non-customers away. There is a lot of renovations, additions and upgrading going on.'' Like Mr. Haycock of Bermuda Home he believes the growth in mortgage activity is an indication that consumers have more confidence in Bermuda's economic and political situation.

"Prices in the real estate market are not rising,'' he said. "Liquidity has picked up. The velocity of the market is starting to move again. There is a mixture of improvement and confidence in the economy.'' In total deposit companies had $933 million worth of mortgages outstanding by the end of 1996, a gain of about $64 million over 1995. Statistics show that 34 houses were completed in the first quarter of 1997, the lowest level in any quarter since at least the start of 1993, according to figures produced by the Planning Department.

The boom years of home building during the late 1980s peaked at 568 completions in 1990. That number has declined steadily since then, with a blip upwards in 1995, to 185 houses completed last year.