Residential mortgage loans in negative equity increased to about 83,000, with a value of $135 billion, reflecting the further decline in property prices in the first quarter.

The Monetary Authority said the unsecured portion of these loans is estimated at about $29 billion, or 5.4% of the total residential mortgage lending of the banking sector.

The three-month delinquency ratio of residential mortgage loans in negative equity remained higher than that of the overall mortgage portfolio (1.11%). However, it improved to 2.56% at end-March from 2.62% at the end of December.

The average interest rate being charged to negative equity homeowners was 0.88% below the best lending rate at the end of March, compared with 0.83% below the best lending rate at the end of 2002, reflecting authorised institutions' efforts to help negative equity homeowners by lowering interest rates.