Lower interest rates have improved the quality of bank mortgage loan portfolios by helping home-buyers make their payments on time, according to Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong. Mr Yam said the mortgage interest rate being offered by most banks was 2.625 per cent, compared with 11.5 per cent in 1999. He said banks had cut their mortgage rates in the past two years to compete for business. The 11 United States interest rate cuts last year, which many Hong Kong banks followed, also had had an effect. The delinquency ratio - the amount of mortgage loans overdue for more than 90 days in terms of total mortgage loans - fell from 1.28 per cent in September last year to 1.22 per cent in December. 'Helped by the declining interest rate environment which alleviated mortgage borrowers' debt burdens, the asset quality of mortgages has improved,' Mr Yam told a Legislative Council meeting yesterday. He said the number of homeowners suffering from negative equity had risen in recent months, which might be due to the fall in property prices. But the total amount of the mortgage loans involved had decreased. Mr Yam said banks were more willing to enter into debt restructuring arrangements to help home-buyers suffering from negative equity. These arrangements include cutting their interest rate. Meanwhile, HSBC yesterday said from March 18 it would use a new standard mortgage document for home-buyers. The document has been jointly developed by a group of bankers and the Hong Kong Mortgage Corp. Unlike the existing mortgage document, which is in legal terms and in English only, the new contract is in both Chinese and English and uses plain language to make it more reader-friendly.