Majority of Australian homeowners are holding on to the idea that more rate hikes would come their way, brushing aside Reserve Bank of Australia's decision this June to pause for any upward movements with comforting assurance that the cash rates have so far reached their ideal level for now.

As shown by the latest Westpac-Melbourne Institute consumer sentiment index this month, about 90 percent of those polled are expecting that interest rates would further shoot up come June next year, with only three percent seeing a decline and seven percent forecasting that the cash rate would maintain its current level.

Up to 61 percent of respondents said in February that rates would jump by more than one percent over the next 12 months and when the same question was posed for the June survey, 46 percent agreed that a cumulative increase of one percent could be expected over the period leading to June 2011.

Westpac senior economist Matthew Hassan said that the overall average for this period is pointing to an expected rise of 85 basis points for the next 12 months, which should raise the standard variable mortgage rate from 7.4 percent to 8.25 percent come next June, surpassing the average of 7.5 percent being registered for the last 15 years.

He said that the figures indicated that consumers had maintained their hawkish attitude on rates as compared to market behaviour and "this would mark the biggest two-year rise in mortgage rates since 1989/90."

Prevailing pricing scheme on financial markets is pointing towards a cumulative rate hike of only 25 basis points by June next year as Westpac is predicting that it should be around 75 basis points over the same period.