Should the Reserve Bank of Australia (RBA) lower interest rates, most Australians would rather reduce debt than go on a Christmas spending spree, a national survey by mortgage broker Loan Market has found.

The Loan Market poll which asked “How would you react to a rate reduction by the RBA in November?” found 55 per cent of respondents said the extra money would go towards mortgage repayments.

Loan Market Chief Operating Officer Dean Rushton said 17 per cent of the 460 respondents said they planned to increase their savings while only 16 per cent believed it would boost their Christmas budget.

He said 12 per cent of the people who took part in the online survey said a rate cut would make no difference to them.

“There’s obviously a strong outlook and evidence for the RBA to reduce the current cash rate of 4.75 per cent at the November board meeting,” Mr Rushton said.

“The RBA is set to act after 12 months of staying on the sidelines and it will be a welcome relief for many consumers.

“The deteriorating global economic environment as well as the sluggish domestic economy outside of the mining boom is the catalyst for the anticipated rate cut.”

Mr Rushton said the survey results showed that consumers remain super cautious and even an initial rate reduction may not be enough to break the shackles.