The bank's annual survey of around 900 people who took out a mortgage over the past year showed that 41 per cent submitted loan applications that were not completely factually accurate — so-called "liar loans".
‘Liar loans’ on the rise as risky mortgages drive house price boom
'Liar loans' on the rise as risky mortgages drive house price boom
By business reporters Michael Janda and Gareth Hutchens
Based on a survey of around 900 borrowers, UBS estimates that 41 per cent had inaccurate mortgage applications.(ABC News: Elise Pianegonda)
Australian home prices have surged almost 20 per cent over the past year, and investment bank UBS has warned that a record level of "liar loans" as buyers "chase the market" could be one reason why.
Key points:
A record 41 per cent of loan applications contain factual inaccuracies
The most common fudges are under-representing living costs and financial commitments
The banking regulator says it has seen "no obvious poor-quality lending"
Home loan customers may need to pay mortgage brokers to save money
Home loan customers may need to pay mortgage brokers to save money
y business reporter Daniel Ziffer
Posted SatSaturday 9 FebFebruary 2019 at 6:07am
Almost 60 per cent of Australians use a mortgage broker to arrange their home loans.(AAP: Lukas Coch)
Borrowers may have to pay an upfront fee when their home loan is arranged, in a move applauded by consumer advocates but which mortgage brokers say would devastate their industry.
Read more
The new fee, one of the most contentious changes recommended by the final report of the Hayne royal commission, would kill off one of the key methods brokers are currently paid — an arrangement commissioner Kenneth Hayne rubbished as "money for nothing".
Currently, most brokers are paid an upfront commission by the bank that finances the loan. The banks then also pay an ongoing fee, called a trail commission, over the life of the loan.
Under the comm…