Australian households have been coping well with record high household debt but this could swiftly change should the Reserve Bank hike interest rates higher than anticipated by the end of 2016, ANZ economists have predicted.

Although household debt is out-stripping household income by 1.7 times, record-low interest rates, as well as growth in household income and cautious household behaviour, have made it manageable, ANZ economists David Cannington and Katie Hill said.

The research found default levels on mortgage repayments - a key measure of financial distress - were less than 0.5 per cent of total mortgages, despite debt levels climbing to record highs.

With interest rates at 2.5 per cent, a further rate cut of 50 basis points in 2015 would ensure that low mortgage stress remained a fixture over the coming year, the economists said.

But a "severe economic shock", such as another global financial crisis, involving sharp interest rate hikes, plummeting unemployment and significant falls in house prices would significantly destabilise household debt, triggering mortgage delinquencies, they said.