Rising house prices and intense social pressure to own a home may be damaging young Canadians’ moral fibre, convincing them that it’s OK to lie on mortgage applications, a new survey from Equifax suggests.
The credit rating agency found that 23 per cent of millennials feel it’s acceptable to lie about their income on a mortgage application, double the 12 per cent of the general population.
Nearly one-in-five (19 per cent) of this group admitted to falsifying information on a loan application, compared to 12 per cent of respondents overall. That’s up from 9 per cent of all respondents in the same survey five years earlier.
It’s hard to say for sure why millennials are more open to mortgage fraud, but it likely has to do with the pressure to buy a home in some markets, said Julie Kuzmic, director of consumer advocacy at Equifax Canada.
“People are concerned they might miss out, and if they don’t qualify for the home they’re hoping for, they may never be able to buy a home,” she told HuffPost Canada.
Homebuyers may also feel that lending standards are too tight, she added.
“People might see themselves as a responsible borrower, they may feel lender guidelines are too strict, that they would be fine carrying a higher amount of debt,” Kuzmic said.
A plurality of respondents ― 48 per cent ― agreed that Canada should loosen the mortgage stress test, compared to 34 per cent who want to keep it as is, the survey found.
More debt, more risk
But higher levels of debt come with higher levels of risk, Kuzmic said.
“One of the things that doesn’t occur to people right away is the risk of higher interest rates. … There is (also) a risk that the person will have unexpected expenses, that homeownership turns out to be more expensive than they expected. … And that’s not to include some of the more catastrophic events like job loss or health issues.”
The survey also found that a solid majority ― 61 per cent ― believe foreign buyers are the principal reason for high house prices.
An even larger majority ― 78 per cent ― believe the government should help homebuyers, with 70 per cent saying the focus should be on first-time homebuyers.