Interest rates could remain low for "decades", the Reserve Bank governor has signalled while warning Australians may be starting on a fresh binge of mortgage debt that could expose one of the nation's biggest economic vulnerabilities.

Amid continuing signs the retail sector is struggling, Philip Lowe admitted there were already signs of a "cross-over" between Australians using last year's interest rate cuts to get their finances in order and people borrowing more to get into the property market.

RBA governor Philip Lowe says low interest rates may be the norm "for decades" while revealing Australians may now be taking on more debt. Credit:Alex Ellinghausen

The RBA sliced official interest rates to a record low of 0.75 per cent last year as it sought to drive down the unemployment rate and lift wages growth. Since it started cutting in June, house prices have rebounded, with Sydney and Melbourne values lifting by almost a percentage point a month.

At its most recent meeting earlier this month, the bank noted that while lower interest rates would help the economy grow faster, they could also increase financial risks.