SYDNEY, Dec 8 (Reuters) - Australian households are under broad financial pressure from high inflation and rising interest rates, but severe stress is still rare and the vast majority of borrowers can service their loans, a top central banker said on Friday.

The head of the Reserve Bank of Australia's (RBA) financial stability group Andrea Brischetto noted that many households had had to cut back on spending to meet loan repayment and the lower paid were under particular pressure.

"But incidences of severe financial stress – where people are struggling to meet even the most basic expenses – is currently limited to a much smaller group," said Brischetto.

The majority of mortgagors had seen their minimum scheduled payments increase between 30% and 50% since the RBA first increased rates in May last year, she added. Since then it has lifted rates to a 12-year high of 4.35%.

Just over 20% of variable-rate owner-occupier borrowers were estimated to devote more than 30% of their income to mortgage payments, she said.

Yet, the RBA also estimated that only 5% found their income insufficient to cover mortgage payments and essential expenses.

"While budget pressures are widespread, most borrowers appear well placed to service their debt and cover essential costs," she added.

The RBA estimated that less than 2% of variable-rate owner-occupier borrowers were at real risk of not being able to cover basic expenses and mortgage payments out of income and savings.

Most households also had substantial equity in the homes, with less than 1% loans in negative equity, she added.

"There appears to be a low risk that financial pressures currently being experienced by Australian borrowers will translate into financial stability issues," she said. (Reporting by Wayne Cole; Editing by Christopher Cushing)