Personal savings are taking the back seat while households ward off interest rates from mortgages, credit cards, and personal loans.

Financial institution ING reports that bank deposits only have an 8 percent increase when households had to pay $771 billion in June. ING Direct chief executive Don Koch admires the Australian prioritization but warns of the disadvantage of having low savings.

He said, “Without a pool of emergency cash, households are vulnerable to unexpected bills or expenses. The good work done to reduce debt could easily be unraveled.”

Based on the ING Direct index, 48 percent of homeowners had to make extra repayments on their mortgage, while 3 percent had difficulties to meet repayments. The current median mortgage balance of $175,509 is down from $177,259 in the first quarter of 2010.

Likewise, the median card debt for each household decreased from $1802 to $1673. As for credit card payments, the Reserve Bank of Australia reports that consumers repaid $20.5 billion in June.

On the other end of the scale, fifty three percent of households have less than $17,000 in savings, 17 percent have nothing reserved at the bank. Surprisingly, the figures for low liquidity or absence of personal savings cover low-income households and 11 percent of households earning $100,000 or more annually.