Property porkies: Record number of home loan applicants fudging the numbers
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The number of home loan applicants obtaining a mortgage after inflating their income and downplaying their living costs has jumped to record levels, according to research by global investment bank UBS.
Thirty seven per cent of borrowers were not entirely honest in their mortgage applications, the bank’s anonymous survey of 903 Australians revealed – despite tougher lending standards imposed since the banking royal commission.
The surge in so-called “liar loans” comes amid a rise in property prices, rebounding auction clearance rates and the Reserve Bank’s widely expected interest rate cut on Tuesday.
It was a significant jump compared to last year, when UBS found that 32 per cent of borrowers fudged their income and expenses when the royal commission was in full swing.
That was an improvement over the 2017 result (at 36 per cent) and led to UBS surmising that borrowers were behaving more “honestly” as a result of the high-profile banking inquiry.
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