Australians have been forced to dip into their savings accounts as mortgage rates hit new highs, Canstar data shows.

The amount of money loaned out for mortgages reached a new peak, increasing by $17.7 billion in June, following two reductions in interest rates.

“In June, the residential mortgage market accelerated rapidly, driven by the two cash rate reductions in February and May,” stated Sally Tindall from Canstar.

“This surge in residential mortgages across the banks mirrors the continued rise in property prices.”

Consequently, data from June shows a 0.74 percent decrease in household deposits—the savings Australians keep in banks. This marks the first decline in a year and the most substantial in over two years.

Despite this, Tindall said the phenomenon is common for this time of year as consumers spend more.

“Household savings took a hit in June as people tucked into their savings in order to pay for end-of-financial-year costs,” she said.

“However, we expect this dip to be temporary, despite the cost-of-living crunch, as Australians remain steadfast in building up their war chests.”