There's no hiding the fact that owning a home in Bermuda is expensive. Buying an average cost house of $1.325 million used to mean that your annual income had to be way over $200,000 if you didn't have a significant down payment - which is way out of the reach for the average Bermudian family.
But over the last two months the Bank of Bermuda has rolled out two new mortgage plans, which help take some of the sting out of trying to get that first home or upgrade to your dream house.
Just this week the Bank of Bermuda unveiled 100 per cent financing for first time home buyers, which allows them to borrow up to $1 million. That allows a couple to get their foot in the door without having to save up for a hefty down payment, by which time housing prices may have skyrocketed again.
The Bank also recently introduced its Flexi Mortgage. This would allow future home owners to make interest only payments for five or 10 years
Richard Brown, head of personal financial services at the Bank of Bermuda, said: "We've listened to the market. We understand that it's very difficult for many Bermudians to get into the housing market. The 100 per cent mortgage, particularly with the interest only element for three years, was seen as an ideal way for people to make that first step."
"The average house price is between $1.3 and $1.4 million."
Trina Roberts, senior personal loans manager, said the average condo price runs between $800,000 to $900,000.
Mr. Brown said: "This is perhaps the first time people have had a chance to have 100 per cent financing. It makes it within reach without them having to come up that additional amount of cash."
He added that it allows people to use money to get new furnishings instead of spending money on the down payment.
Frederica Forth, senior service and sales manager, personal financial services said since Monday: "The lenders have met with over 17 people...with walk-ins we've seen over 30 people."
Below are three of the Bank of Bermuda's mortgage plans:
85 per cent financing
On a $1 million home
With a 7.25 per cent interest rate over 20 years, you'll need to take home 15,807.52 a month for a monthly payment of $7,903.76.
With a 7.25 per cent interest rate over 30 years, you'll need to take home $13,643.52 per month for a monthly payment of $6,821.76.
On a $1.325 million home
With a 7.25 per cent interest rate over 20 years, you'll need to take home $20,944.96 per month for a monthly payment of $10,472.48. With a 7.25 per cent interest rate over 30 years, you'll need to take home $18,077.68 per month for a monthly payment of $9,038.84.
Home Start Mortgage
100 per cent financing for up to $1 million. This is for first-time home buyers only with interest-only payments for the first three years.
On a $1 million home
With an 8 per cent interest rate over 20 years, you'll pay $6,794.58 per month for the first three years and $8,982.57 over the last 17 years. With an 8 per cent interest rate over 30 years, you'll pay $6,794.58 for the first three years and $7,542.80 over the last 27 years. You'll need to be taking home $13,589.16 a month to start either of those loans.
Flexi Mortgage
Allows for the homebuyer to only pay the interest for the first five or 10 years. The loan amount can be for up to $2 million. You can borrow up to 75 per cent. Aimed at people who already have money for a down payment or trading up on a current home.
$1.325 million home, 8 per cent interest rate
For the first five or 10 years the payment will be $9,002.71. You'll need to be taking home $18,005.42 monthly to start the loan.
On a 20-year loan with interest only for the first five years, the last 15 years will be $12,471.90 at 7.75 per cent interest.
On a 20-year loan with interest only for the first 10 years, the last 10 years will be $15,901.41 at 7.75 per cent interest.
On a 30-year loan with interest only for the first five years, the last 25 years will be $10,008.11 at 7.75 per cent interest.
On a 30-year loan with interest only for the first 10 years, the last 20 years will be $10,877,57 at 7.75 per cent interest.
Mr. Brown added that the Bank isn't finished in rolling out different mortgage products.
"I can promise you one thing - This isn't the end of the line. All I can say is watch this space. We've launched two, what we see as very attractive products. There are a couple of other things that we're playing with at the moment. The two that we've launched are in a series of new products. Over the next couple of months something else might appear."
