Insiders say more and more Australian home buyers are getting in over their heads.

Westpac this week reported an increase in the number of Australians falling behind on their mortgage payments.

There has also been a rise in debt defaults.

Westpac says the proportion of loans at least a month behind in repayments is up to 1.39 per cent, compared to about 1 per cent nine months ago.

The number of home loans over 90 days have jumped too.

Analysts say the loans are being supported by artificial collateral value - inflated property values.

They also warn that debt sustainability is based on artificially low interest rates.

RBA governor Glenn Stevens mentioned the problem during his last speech before stepping down, but was unable to offer a solution.

“Gross public debt, if you add up all levels of government, is about 40 per cent of GDP,” Mr Stevens said.

“We're rightly concerned about the trajectory of that ratio in to the future, but gross household debt is three times that size, it's 125 per cent of GDP.

“That was not unmanageable, but nor is it a low figure.”