Realtors are celebrating news that the Bank of Bermuda has cut interest rates for mortgages - though the move may not have much effect on the cost of rent.

And competitors are focusing on maintaining their position in the market as Bermudians swarm seminars showing them how to transfer their mortgages to the Bank of Bermuda.

The Bank of Bermuda on Tuesday announced that all personal loan interest rates - for all mortgages and all loans - will be reduced by 0.50 percent to 6.5 percent.

That move brings the Bank of Bermuda's personal loan rates to the lowest in the market. The bank also plans to waive personal loan service fees for the next three months and provide a 48-hour personal loan approval service.

It may still be too early to tell how competitors plan to react to the move, however.

“We have always offered competitive lending products to our customers, and indeed were the first bank in Bermuda to offer 95 percent residential mortgages,” Bank of Butterfield executive vice president and chief financial officer Richard Ferrett said yesterday.

“We continually review our rates in light of market conditions to ensure that we maintain our competitiveness, and will naturally focus on maintaining our leading position in the market.”

Calls to Capital G, the Island's third bank, were not returned yesterday.

The Island's real estate agencies are thrilled with the move, however.

“It's terrific they have cut rates,” Coldwell Banker agency manager Susan Thompson said yesterday. “Anything to encourage people to purchase property is a fabulous idea.”

With more people suddenly in a position to buy, the “already-saturated” market will become more competitive, she said. “I think people are going to get quite creative in ways of buying property.”

The move may not create more business for real estate agents, however - for the same reason it may not drive rents down as more people abandon renting in favour of purchasing their own home.

“We still have a limited amount of units on the Island and that's driving it,” she said. “Demand is outstripping supply.

“We may now have more people qualified to buy, but we need the property to sell to them.”

But, she added: “It is very honourable of the bank to go to this extent to educate and to make loans more affordable, because over the long-term customers are saving thousands and thousands of dollars.”

The Bank of Bermuda has offered seminars for the last two nights explaining their package to interested Bermudians.

Representatives from the bank, local real estate agencies and legal firms have been running the seminars, which offer help and guidance on how to buy a home, how to get into the housing market, market trends, financing alternatives and legal matters.

The seminars were filled to standing room only both nights. Two more will be held on May 3 and 5, open to all the public.