Despite concerns that large numbers of borrowers will have trouble shifting from interest-only mortgages to principal and interest, Westpac's latest update suggests that an orderly transition is underway.The bank released a December quarter update yesterday, focusing on its capital, funding and credit quality.In the December quarter, 4793 borrowers reached the end of their interest-only period and switch to P&I, and another 4042 borrowers initiated the switch themselves - a total of 8835.The number of switches was up from 7937 in in the September quarter.Morgan Stanley released a report last week, estimating that 650,000 borrowers with A$23 billion of mortgages were "trapped" in their interest-only loans and would struggle to convert to P&I.Westpac says the proportion of interest-only loans in its Australian mortgage portfolio has fallen from 46 per cent in September 2017 to 32 per cent in the December quarter. Interest-only loans accounted for 23 per cent of settlements during the quarter.Fifty-five per cent of the bank's interest-only loans will reach their term over the next three years and need to be refinanced.Meanwhile, delinquencies have increased a little. Loans overdue by 30 days or more rose from 144 basis points in March to 146 bps in December, and loans overdue by 90 days or more rose from 69 bps in March to 76 bps in December. The bank says the increase in 90-day plus delinquencies was driven in part by operational issues in its collections department, as well as a rise in arrears in Western Australia and New South Wales.The bank reported statutory net profit of $1.95 billion for the December quarter, which is in line with the quarterly average for the second half of the 2017/18 financial year.The net interest margin, which was not disclosed, was higher "following some re-pricing late in the 2018 financial year."The bank raised $9.1 billion in term funding in the December quarter and a further $6.7 billion in January. This included a five-year senior transaction, a three-year transaction , a two-year transaction and a five-year covered bond.It has $24 billion of maturities in the remainder of the current financial year and $30 billion of maturities next financial year.