PEOPLE are paying off their debt faster than ever, says Australia's biggest bank.

Westpac's acting chief operating officer, Jim Tate, has told an inquiry in Sydney that while Australia had high household debt, people were anxious to pay it off because of the financial downturn.

"The behaviour in the mortgage books currently is that people are paying off debt faster than we have ever seen," Mr Tate today told the Senate inquiry into the banking sector in the aftermath of the 2008-2009 global financial crisis.

"People are paying off debt actively, twice as fast as they have been over the past 30 years."

He said people were anxious.

"This is not just in households, this is across business now for three years.

"They read the papers, they see what's going on and they say: 'Look debt is not going to be my friend if things go bad, so I'm going to get myself back into a situation where I've got a lot of equity back in the house'."

Mr Tate said that on average people had 40 to 50 per cent equity in their homes.

The inquiry continues in Sydney today and tomorrow.