People are paying over their minimum monthly mortgage repayments.

People are paying over their minimum monthly mortgage repayments.

AUSTRALIANS are rushing to pay off their home loans faster than many households overseas, with half of all borrowers ahead of their mortgage repayment schedule.

Despite lingering concerns about the high level of household debt in Australia, the Reserve Bank yesterday said lower interest rates and consumer caution were driving more people to make more than their minimum monthly mortgage repayment.

The shift towards greater conservatism, also reflected in a rush to bank deposits, would provide many consumers with a ''buffer'' if they lost their jobs, the bank said in its check-up of the financial system.

''Many households have a buffer they could temporarily draw on to stay current on their loan repayments if their incomes were to fall,'' the report said.

''The share of Australian households paying their mortgage ahead of schedule is high compared with many other countries, though the available evidence suggests it is broadly similar to Canada.''

The trend had been accentuated by recent cuts in interest rates, because most people kept their repayments unchanged, allowing them to pay off more of the loan principal.

Some borrowers had also made large one-off repayments with lump sums such as bonuses, it said.

Of those borrowers who had a repayment buffer, 30 per cent were more than two years ahead of their repayment schedule.

These were most likely to be older borrowers with high incomes, it said.

The figures come amid ongoing concerns that the high level of household debt - which is mostly linked to residential property - poses an economic risk to the country.

The International Monetary Fund last week said that the high level of household debt in Australia, coupled with falling house prices, was a point of ''vulnerability''.

In contrast to the debt-fuelled spending spree in the years before the global financial crisis, however, the Reserve Bank said households had adopted a ''relatively prudent'' approach to their finances recently.

In another sign of financial conservatism, households have been shunning share investments in favour of bank deposits.

Since 2007, the share of household assets invested in the sharemarket has halved from 18 per cent to 8.5 per cent, while the share of assets in bank deposits has jumped from 18 per cent to 25 per cent.