Survey says… Nearly 50% of Canadians think mortgage fraud is common, and some are willing to do it

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Unfortunately, half of this country’s citizens 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% of Canadians say artificially inflating one’s income on a mortgage is never acceptable, 17% of respondents said it is.

Even more Canadians — 18% — said it was acceptable to misrepresent elements of one’s employment in order to secure a mortgage.

47% of respondents said they feel mortgage fraud is common, while 12% said they think it’s very common. Only 5% 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% 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% 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% 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.