New mortgage lending continued to decline last month, but refinancing activities intensified on heightened competition, according to the Hong Kong Monetary Authority. The amount of gross new loans made last month fell 5 per cent from a month earlier to $7.7 billion. That compares with an 8.3 per cent month-on-month fall in October. New loans approved last month jumped 34.8 per cent from October to $13.1 billion, largely because of refinancing activity. Refinancing loans accounted for 50.6 per cent of all loans approved in November, up from 40.2 per cent of the total approved in October. The increase in proportion of refinancing lending reflected the intensified competition between banks for customers through various preferential offers including below prime rates and cash rebates. 'Competition continued to intensify during November,' HKMA deputy chief executive David Carse said. 'However, sample checks recently conducted by the HKMA suggest that institutions are adhering to prudent lending criteria, including the 70 per cent loan-to-value ratio, in respect of refinancing loans.' As a result of competition in mortgage pricing, 91.6 per cent of new loans were granted at the best lending rate during November, compared with 89.3 per cent in October. Moreover, 2.4 per cent of new loans were granted at below the best lending rate for the whole term of mortgage, compared with 1.9 per cent in October. Some bankers said they expected competition for mortgages would intensify further if Hong Kong Mortgage Corp's plan to relax its buying criteria for home mortgages materialised. The relaxed buying criteria would invite foreign banks to step into the mortgage businesses in anticipation of selling some of their loans to the corporation, they said. Analysts said banks' competition for mortgage business would remain intense unless property transactions picked up. The amount of outstanding mortgage loans eased 0.12 per cent last month, compared with a slight 0.13 per cent rise in October, according to the HKMA.