Australian mortgage arrears fell in April, according to S&P's latest analysis of securitised domestic mortgage pools.Despite further deterioration in the credit quality of prime residential mortgages in Queensland, NSW and Victoria, the ratings agency's arrears performance benchmark (known as the "SPIN") improved one basis point to 1.36 per cent compared with March.The national decline in arrears experience was due to sharp improvements in the servicing performance of prime mortgages in Tasmania and the Northern Territory.Mortgages in arrears by 30 days or more in the Northern Territory fell 10 basis points to 2.32 per cent, while in Tasmania the rate tapered by six bps to 1.3 per cent.There was also a modest improvement in the performance of Western Australian home loans (down 2 bps), however the state remains the most stressed borrower market with an arrears rate of 2.7 per cent. The slide in credit quality in the three largest states slowed during April with NSW, Queensland and Victoria posting modest increases in arrears rates of one, two and three bps, respectively. The increases in arrears rates for each of the three states was more dramatic between November and February when the monthly movements exceeded 10 bps. Since November last year the arrears experience of national mortgage pools analysed by S&P swelled by 36 per cent.The worst performer over the six-month period was the Northern Territory where arrears soared from 1.5 per cent to a peak of 2.42 per cent in March.The national improvement in credit quality during April was more conspicuous in the non-conforming mortgage category.According to S&P, the arrears rate on non-conforming loans fell 33 bps to a record low of 3.86 per cent during the month.