Bankers have been urged to be more considerate to the estimated 81,000 homeowners caught in the negative-equity trap because both parties are 'in the same boat'. They could also exercise discretion to depart from Monetary Authority guidelines which advise banks against offering mortgages to homeowners whose payments would be greater than half their monthly household income, a senior financial official said yesterday. The official stressed the Government would not offer further assistance to homeowners whose properties were worth less than their mortgages. Secretary for Financial Services Stephen Ip Shu-kwan, in a reply to a question from Democrat Yeung Sum, said more intervention would give rise to 'financial and moral hazards'. Last month the Government announced it would increase the tax deduction limit for housing loan interest from $100,000 to $150,000. According to a recent survey by the Monetary Authority, there are about 81,000 cases of negative equity, with $150 billion of loans outstanding. About 40 per cent of the homeowners, who bought their properties several years ago when bank rates were higher, are still having their mortgage interest charged at the best lending rate or higher. The current market practice is to charge mortgage interest at 2.5 per cent below the best lending rate, or prime rate, which was cut to 5.25 per cent yesterday. Mr Ip agreed the Government had a role to play but said it was important for banks to do their best, saying 'it does no good to the banks either, if the homeowners are forced to default on repayments'. He said he was pleased some banks were willing to consider allowing homeowners to repay mortgages over 40 years instead of the usual 20 to 25-year period. Democrat Albert Chan Wai-yip urged the Government to launch a loan scheme to help those with negative equity survive the economic slump.