Residential mortgage loans of mainland banks in Shanghai fell 6.6 per cent during the first six months of the year amid the government policy to tighten credit to property developers. At the end of June, 247.02 billion yuan of residential mortgages remained outstanding at the banks, down from 264.49 billion yuan at the end of last year, the Shanghai office of the China Banking Regulatory Commission said. That compared with the 11 per cent yuan lending growth nationwide in the same period. Residential mortgages account for most of the retail lending by Chinese banks. 'In the first half, prepayment of residential mortgages accelerated as a result of residential mortgage rate rises,' the CBRC's Shanghai office said in yesterday's statement. The effect of earlier macroeconomic tightening measures became more pronounced in the first half, compounding the mortgage crunch, the statement said. In addition to increasing mortgage rates, China has raised the minimum down payment for housing loans and introduced taxes to curb property speculation.