b Almost a third of Australian mortgages contain lies according to the global investment bank UBS.
A detailed survey of more than 900 people who took a loan over the past 12 months, found that only 67% of borrowers rated their applications as “completely factual and accurate.”
The other 32% admitted to documents that were “mostly” or “partially” accurate and the remaining 1% preferred to “not say” how accurate their applications were.
Looking state by state, New South Wales and Victoria – the states with the two most expensive markets – lied the most. They were followed by WA, ACT and Tasmania.
SA, Queensland and NT were the most honest, with around 75% of borrowers in those states telling the whole truth.
Using the average turnover of home loans in Australia as a measure, UBS estimates that around $500 billion worth of outstanding home loans contain some form of pork pie.
The most common lie was understating living costs (30%), followed by understating other debts (15%) and overstating income (15%).
Back in April, UBS “rang the bell” on the Aussie housing market, calling the peak of the housing room.
UBS now believes that Australians are even more vulnerable to a crash or major correction.
“This survey suggests many people have come to take house price inflation as a given and are prepared to be factually inaccurate on their mortgage application to ensure they get access to housing leverage,” UBS said.
According to UBS, ANZ has the most “liar loans” (47%), followed by NAB (38%), CBA (33%) and Westpac (31%).
In what is a disturbing trend, 37% of borrowers who applied through a broker said the broker suggesting lying. The banks were more honest, with 8% of customers saying a banker suggested fibbing.
If people being to default on these loans and house prices suddenly drop, it could spell disaster.