Australian citizens are now cautious in their borrowing behavior, according to the Reserve Bank of Australia.

An increased debt will leave Australian households in shock with possibilities of low income and weakening consumer spending.

"We see at present a certain caution in their behaviour - even though unemployment is low, and measures of confidence have been quite high, consumer spending has seen only modest growth," RBA Governor Glenn Stevens told an audience in Western Sydney on Wednesday.

"The long downward trend in the saving rate seems to have turned around and I think we are witnessing, at least just now, more caution in borrowing behaviour.

"Of course this will have been affected by the recent increase in interest rates, but the level of rates is not actually high by the standards of the past decade or two.”

The RBA performed a series of cash rate six times since October last year until May to its current 4.5 per cent.

Mr. Stevens noted the household sector was the cause of a big rise in debt for the past ten years.

However, he said that Australia's mortgage arrears rate was devalued by global standards and borrowers have performed very well in terms of household debt levels services.

Still, the RBA governor explained that debt levels increase should not be sustained for years to come.

“To be clear, my message is not that this has been a terrible thing," he said.

"(But), one would think that, however well households have coped with the events of recent years, further big increases in indebtedness could increase their vulnerability to shocks - such as a fall in income - to a greater extent than would be prudent.”