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

It comes as the amount of money lent to borrowers in mortgages rose to a new high, increasing by $17.7 billion in June on the back of two interest rate cuts.

“The residential mortgage market went into overdrive in June, fuelled by the two cash rate cuts in February and May,” Sally Tindall from Canstar said.

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

As a result, figures from June indicate household deposits – the amount Australians have saved in the bank – dropped 0.74 per cent in the month, the first fall in 12 months, and the largest in more than 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.”