Millennials are more likely to fib on their mortgage applications, while a majority of Canadians believe mortgage fraud is on the rise. These are some of the findings from a survey by Equifax Canada on current perceptions and trends around mortgage fraud.

Mortgage fraud occurs when a homebuyer or one of their real estate partners (e.g., mortgage broker, real estate agent, or lawyer) misrepresents or lies about information to obtain a mortgage that would not have been approved otherwise. Equifax’s survey asked 1500 Canadians from across the country to share their experience with mortgage fraud. Highlights from the report include:

• 23% of Millennials believe it’s acceptable to inflate their annual income when applying for a mortgage (double the national average).
• 19% of Millennials surveyed admitted they were not entirely truthful on a credit or loan application, compared to the 12% national average);
• 53% of all survey respondents believe mortgage fraud is a growing problem;
• 51% of all surveyed respondents indicated they feel mortgage fraud is more likely to be perpetrated by organized crime.
• 16%  think mortgage fraud is a victimless crime (a legal offense to which all parties consent and no party is injured).

“It’s concerning that so many younger adults we surveyed believe it’s OK to inflate their income to purchase the home they want,” said Julie Kuzmic, Director of Consumer Advocacy at Equifax Canada. “Fudging income numbers when completing a mortgage application is fraud. It also becomes a slippery slope for these people who may end up stretching themselves too thin.”

“What some may see as a little white lie during the mortgage application process could have legal consequences or become a very hard lesson for people to learn if they cannot keep up with their mortgage payments,” she continued.

The survey also collected feedback on the challenges of purchasing a home in Canada. Notably, it found that 61% of consumers believe foreign investments in real estate are the principal cause for higher home prices; while 78% of consumers surveyed think the federal government should help homebuyers in some way.

Relatedly, nearly half of survey respondents said the government should relax Canada’s mortgage stress test, while 38% said it should be eliminated altogether.