Nearly half of Canadians say they think mortgage fraud is common in Canada, while a sizeable portion think it’s acceptable to inflate income or misrepresent your employment to secure a mortgage.
Those were the findings of the latest BNN Bloomberg and RATESDOTCA survey, conducted by Leger. The survey was sent out to respondents in mid-February, and surveyed 1,521 Canadian over the age of 18.
Mortgage fraud can take several forms — this includes falsifying income, lying about a part-time or contract role, being full time or misrepresenting the source of your down payment, among other lies or omissions.
The survey found that while 70 per cent of Canadians say artificially inflating one’s income on a mortgage is never acceptable, 17 per cent of respondents said it is.
Even more Canadians — 18 per cent — said it was acceptable to misrepresent elements of one’s employment in order to secure a mortgage.
Forty-seven per cent of respondents said they feel mortgage fraud is common, while 12 per cent said they think it’s very common. Only five per cent said they think it’s very uncommon.
The issue of mortgage fraud in Canada has been a growing problem in recent years. Equifax has said that it has seen a 52 per cent increase in mortgage fraud cases since 2013.
The problem is no doubt being exacerbated by an extremely unaffordable housing market across the country. RBC said that at the end of 2022, the average household needed to spend 62.7 per cent of their income to cover the costs of home ownership. That was the worst level on record. In some cities, such as Vancouver and Toronto, those numbers climbed to a shocking 95.8 per cent and 85.2 per cent of income, respectively.
High payments are due to a massive increase in interest rates in the past year, which have more than offset a decline in prices. The Bank of Canada’s overnight rate, which is used to help set lending rates, rose from near-zero at the start of 2022 to 4.5 per cent as of Jan. 25.
Meanwhile, home prices across the country have fallen in that time. The Canada Real Estate Association shows that the average Canadian home cost $612,204 in January 2023, down 18.3 per cent compared to a year ago.
BNN Bloomberg has teamed up with RATESDOTCA to take the pulse of Canadians every month on key pocketbook issues as we strive to better understand how households are navigating COVID-19. This is the latest instalment in monthly special coverage.
An online survey of 1521 Canadians aged 18+ was completed between February 17th and 19th, 2023 using Leger’s online panel. No margin of error can be associated with a nonprobability sample (i.e., a web panel in this case). For comparative purposes, though, a probability sample of 1521 respondents would have a margin of error of ±2.5 %, 19 times out of 20.