ENABLING clients to live their property dream is the philosophy behind Butterfield Bank’s recently launched mortgage package.
The keenly awaited product entered the market in the summer with a well-attended launch party at the Royal Yacht Hotel. The timing of the event could hardly have been better.
‘It took place a week or so after the lifting of the Covid-19 restrictions,’ explained Tony Ogilvie, senior lending specialist at Butterfield Bank (Jersey) Ltd. ‘It was wonderful to be able to socialise again because that is a very big part of what banking business is all about. At last, we had some actual face time with people, rather than the virtual kind.’
Butterfield has a long and proud history. It was the first bank in Bermuda, having evolved from a family business originally founded as a trading firm in 1784. It was established as a private bank in 1858 and is very much a relationship-driven institution.
The company is certainly not new to the mortgage market, having had a presence in Guernsey for some 40 years. It is recently arrived in Jersey but, given that retail banking lies at its commercial core, it has built up considerable expertise over the years. Alan Day, a senior banker, has been brought over from Bermuda to help lay the foundations for Butterfield’s Island home.
‘We had been trying to establish a presence in Jersey for some time,’ explained Mr Ogilvie. ‘Eventually, about three years ago, we were successful in acquiring the banking and custody side of Deutsche Bank.’
When it comes to the new Mortgages by Butterfield product, the emphasis is firmly on service and turn-around time. A quick decision is guaranteed for clients and the whole operation – including underwriting – is conducted in-house.
‘The service has been well received,’ said Mr Ogilvie. ‘A call to our mortgage line will connect you with a person here in Jersey and a decision can usually be agreed within a couple of days. You will always have a contact here throughout your Butterfield journey.
‘Our aim was not to be too aggressive too quickly. However, we will soon be reviewing our pricing with a view to becoming more competitive, now that we know that we have the right people in the right places.
‘We are certainly very happy with the uptake so far. In fact, we managed to hit our year-end target before the end of September.
’ Butterfield’s mortgage package is not currently pitched at the first-time buyer market, although that may change in the future. With a maximum loan to value rate of 80%, the bank sees its role as one of helping clients to achieve their dream home; providing assistance to climb the property ladder for those who have already established a foothold on the first rung.
‘We are coming more from the angle of affordability,’ Mr Ogilvie said. ‘We are making sure that people are not over-committing themselves and not overstepping their limits.
‘Property prices in Jersey are hard on first-time buyers and we would require a deposit of 20%. Our objective is to be sure that we establish a strong mortgage book.
’ Particularly attractive to the market will be the ability to fix mortgage payments in the knowledge that there will be no change for ten years. That, stressed Mr Ogilvie, is a guarantee that offers valuable security.
‘Rates will inevitably go up,’ he reasoned. ‘At the moment, interest rates are at the lowest that they have ever been, so this is certainly a good time to borrow.
’ The point is worth making. Butterfield’s variable-rate mortgage is 2.25% above the Bank of England base rate, with a floor of 0.25%. An opportunity to take advantage of such low rates will undoubtedly be seized upon by home owners keen to acquire more space.
‘The lockdown encouraged people to take a good look at their homes,’ said Mr Ogilvie. ‘For many of them – perhaps those needing a spare bedroom with another child on the way, or maybe just seeing the value of having space for a home office – this is clearly the time to move to their dream home.
’ Milton Freitas, assistant vice president, lending specialist, joined Butterfield from NatWest four months ago. He was keen to highlight the benefits of the bank’s Lifestyle Mortgage.
‘This is something very different from the usual run-of-the-mill mortgages,’ he said, ‘as it gives far more certainty and flexibility. You could put, for example, savings of maybe £50,000 into your mortgage account. The more that you hold in there, the less interest you will pay.
‘That makes it a very flexible mortgage indeed. We are trying to have something available for everyone. We will look at each case individually, consider their circumstances and then tailor a package for them accordingly making sure that it is affordable.
‘I believe that having that personal contact with clients is especially important.’