New loans drawn down during April dropped by 12.3% to $11.5 billion after recording strong growth in the previous two months.

Monetary Authority Deputy Chief Executive William Ryback says this minor correction may be good for the overall future development of a more healthy market.

While there was a decline, mortgage lending in April was still high in relation to the average level of the past few years, he added.

New approvals also went down in April by 22.7% in value terms to $12.4 billion, and by 21.4% in number terms to 8,161 cases.

This was driven by decreases of 48.6% and 18.3% in approvals for primary market and secondary market transactions respectively, outweighing the 10.2% surge in new approvals for refinancing loans. The number of new applications recorded a slump of 24.6%.

Fixed-rate mortgage approvals on the rise

The proportion of new approvals priced at more than 2.5% below the best lending rate dropped to 62.9% from 63.8% in March but that for fixed-rate mortgages increased to 10% from 8.7% in March.

The outstanding amount of mortgage loans edged up 0.1% to $525.8 billion. 

The improvement in the quality of the mortgage portfolio continued, as the mortgage delinquency ratio dipped to 0.66% from 0.7% in March while the rescheduled loan ratio increased slightly to 0.5% from 0.49%. The combined ratio improved to 1.15% from 1.19%.