Bank of Bermuda yesterday slashed 0.5 percent interest off all of its loans in a move that could spark a price war among the Island?s lenders.

Announcing the move, Bank of Bermuda?s chief executive officer Philip Butterfield said if the rate cut caused a battle between the bank and other lenders it would be ?great for consumers?.

Mr. Butterfield yesterday unveiled the lowest interest rates for loans and mortgages on the Island at 6.5 percent and announced all fees would be waived during May, June and July.

This means that a typical one percent fee on a $700,000 loan, $7,000 would be saved by the customer.

And the bank is also offering advice about how customers can move their loans or mortgages over from other lenders to Bank of Bermuda to take advantage of the lower rates.

?We have lowered the rate by 50 basis points,? said Mr. Butterfield. ?We are now offering the lowest rate of interest in Bermuda.?

The move appears to be part of an aggressive campaign by the bank to get more customers through their doors and break the long-standing gentlemen?s agreement in Bermuda that has kept the cost of borrowing high and interest rates low for savings compared to other parts of the world.

It will be followed up by an advertising campaign today and seminars on borrowing aimed at residents being able to afford to own a piece of the rock.

In a Press conference yesterday with Frederica Forth, business development manager, Mr. Butterfield refused to be drawn on rates of other banks and lenders, but he said that the bank would work with customers to allow them to move their mortgages across to Bank of Bermuda, regardless of how difficult this may prove.

?These offerings make it more affordable for everyone to fulfil their personal dreams of owning their own home, renovating their house, buying a car or anything else that may be important to them,? said Ms Forth.

The bank will also provide a 48-hour personal loan approval service and said that within two business days of submitting an accurate and completed personal loan application, customers will receive an indication of loan approval.

The bank has also set up a dedicated call centre for all personal loan queries (299 LOAN), or customers can visit the Loan Centre at the LPG building and meet with the lenders to discuss their lending needs.

Mr. Butterfield said: ? We have stated before that the amalgamation with HSBC would result in benefits for Bank of Bermuda and the Bermuda community. We predicted that joining the HSBC Group would bring enhanced product offerings to our customers. These lowered rates are examples of this.?

Starting yesterday evening, Ms Forth, who works in personal loans, along with representatives from the Island?s realtors and law firms, will be hosting the first of four mortgage seminars, offering advice and guidance on the process of buying a home, how to get into the housing market, market trends, financing alternatives and legal matters.