Holidays and dining out have fallen down the priority list for mortgage holders, with most focused on taking advantage of record low interest rates to pay off their loans.
A survey by Australia's biggest credit union, CUA, shows more than three quarters of people with mortgages are likely to make extra payments on their home loans with interest rates falling.
Only about a third of the 1,000 people surveyed said they would be likely to use the extra cash to treat themselves to a holiday, dining out or a hobby.
And three quarters said they were unlikely to put the money in shares or investment funds.
CUA head of product Mark Petty said mortgage holders were prioritising paying down their home loan debt rather than spending.
"Mortgage borrowers are very debt focused and want to get ahead financially by repaying their mortgage as quickly as possible, which is a responsible thing to do," he said.
"The current low interest rates are helping people along that journey."
The Reserve Bank cut its cash rate to a record low two per cent in May, with home lenders passing on most of the cut to take variable mortgage rates to historic lows.
However, official figures show that retail spending has stalled after 10 consecutive months of gains.
Consumers spent $24.1 billion in April, the Australian Bureau of Statistics found, which was flat when compared to March.
Some economists believe consumer spending will remain weak over the next few months, given the limited growth in wages.
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