The Bank of Butterfield's 25-year mortgage policy is an attempt to spread the wealth and make home ownership possible for more people, a spokesman said on Friday.

And the bank is also bringing greater flexibility to the rules regarding downpayments for first-time homeowners.

A. Michael Smith, senior manager for banking at the Bank of Butterfield shared these statements during an interview with The Royal Gazette .

Late last week the Bank of Butterfield announced the change in policy for first-time homeowners.

It is intended for new borrowers or those with mortgages elsewhere who wish to refinance, the bank said in press release.

At the same time the Bank of Butterfield unveiled a new pricing structure for two, four, and five-year fixed mortgages, replacing its one and three-year mortgages and reducing its fixed rate on the new line.

The bank's new two-year mortgage will carry an interest rate of eight percent while its four-year mortgage weighs in at 8.5 percent. Meanwhile, the bank has reduced by 1 of one percent its five-year lending rate, now pegged at 8.75 percent.

Mr. Smith said that the bank was not trying to be particularly original when it announced its policy change.

"What we have done is not new to the rest of the world,'' he said. "But we want to introduce a degree of flexibility to mortgage lending in particular.

"Where there is significant interest rate impact the cash flow implications to a borrower (over 25 years) are quite significant.'' Mr. Smith scotched suggestions that the real reason for the change was that the bank had a surplus of funds to lend and was trying to stimulate interest in the real estate market.

He added: "(The 25 year mortgage) will bring the possibility of owning a house a reality for more people who before this may have thought that it was out of their grasp.

"At the end of the day we are in the business of lending money and we are trying to find different ways to do it.'' Moreover, Mr. Smith said that the Bank of Butterfield has reviewed its position on downpayments and was now willing to be flexible on the point.

"Thirty five percent is not the rigid requirement with us we are willing to talk. We will accept less.

"This is all an indication of what the bank is doing in a lot of areas we are thinking about things differently and we are coming to the market with new and innovative ideas.''