Posted: 7 October, 2016 by Newsroom

Aussies Desperate To Buy Houses Are Lying On Their Mortgage Applications

Tags: housing

Australians are so desperate to enter the property market that nearly one third of us have lied on our mortgage applications.

A survey of more than 1200 Australian mortgage holders who have taken out a loan in the past two years discovered that “liar loans” are more common than previously thought.

The study, by investment bank UBS, showed that 28% of mortgage applications were “not factually accurate”.

The most common lies were:

  • Under-representing living costs (26%)
  • Under-representing other financial liabilities (17%)
  • Over-representing household income (14%)

One in twenty applicants admit that their application was only “partially factual”.

Those that used a mortgage broker were more likely to include factually incorrect information on their application, with a third of people who got their mortgage through a broker admitting to lying.

“We believe these results are disturbing given: the recent housing market reacceleration; elevated household leverage (186 per cent debt to income); and mortgages accounting for 62 per cent of bank loans,” UBS analysts said.

“While banks have tightened underwriting following APRA’s ‘sound lending’ guidance, it does not appear to have prevented applicants ‘stretching the truth’. While low unemployment and rising house prices may help prevent losses near term, more rigorous auditing of applications appears essential, especially via brokers.”

Tags: housing

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