Most Australians plan to use their 2008-09 tax refund on retiring debt amid expectations of interest rates rising, a national survey has found.

The poll by leading mortgage broker Loan Market Group found 54 per cent of respondents said they would use any refund received to pay off mortgages or credit card debt, while 33 per cent said they would put the money into their savings accounts.

Only 13 per cent of the 600 online survey respondents said they planned to spend the money on luxuries such as holidays, consumer goods or entertainment.

Loan Market Group Chief Operating Officer Dean Rushton said the survey results showed consumers, particularly home owners, were being cautious with the likelihood of interest rates increasing again.

“People are being careful with their money even though there are many signs that the Australian economy has weathered the global financial crisis in pretty good shape,” Mr Rushton said.

“While official interest rates are at near record lows of 3.0 per cent, the Reserve Bank of Australia has indicated that bringing the cash rate down to that level was a temporary measure and rates will most likely head north.

“That could happen as early as next week but it would be more likely that the RBA will continue to keep an eye on economic data over the remainder of the year before lifting rates in the first quarter of 2010.

“However, it seems from our survey results that consumers are already preparing for rates to rise sooner rather than later.”

Mr Rushton said the RBA keeping the cash rate on hold for the past five months had helped generate confidence and stability in the economy.

“Although the housing market has been performing strongly, other sections of the economy have been patchy and there remain concerns about unemployment,” he said.

“Even a small increase in official rates could have a negative impact on the confidence of consumers and employers.”

The current Loan Market Group online survey looks at what additional debt people have taken on this year.

People can participate in the latest survey by visiting www.loanmarket.com.au or www.xinc.net.au or www.home-loans.com.au