In keeping with a 2024 Royal LePage survey, 30% of Canadians planning to retire within the subsequent two years anticipate to hold mortgage debt into retirement, up from simply 14% in 2016. That’s a dramatic shift in lower than a decade, and a robust sign that Canada’s retirement panorama is altering.
So what’s behind this pattern, and must you be involved in the event you’re heading into retirement with a mortgage?
Why are extra Canadians retiring with mortgage debt?
A mix of rising residence values, later-life borrowing, and altering retirement expectations is reshaping what retirement seems like in Canada. Based mostly on the Royal LePage examine and what we see each day with our shoppers, listed below are the large drivers:
Homeownership is dearer than ever
Canadian residence costs have climbed considerably over the previous 20 years. Many pre-retirees merely haven’t had sufficient runway to totally repay their mortgages, particularly in the event that they purchased later in life or refinanced through the low-rate period.
Many Canadians are serving to their youngsters
Royal LePage discovered that 48% of Canadians aged 55+ who’ve youngsters say they’ve helped them financially, usually with a down fee. Some took out residence fairness loans or refinanced to take action, which means they’re now carrying that debt into retirement.
Retirement timelines are shifting
Practically one-third of soon-to-be retirees stated they’d think about delaying retirement particularly to handle their mortgage. Others plan to hold the debt and finances accordingly, signalling a rising consolation with retiring whereas nonetheless in compensation mode.
Individuals are tapping into residence fairness
Whether or not it’s funding a renovation, protecting way of life bills, or offering intergenerational assist, many Canadians are utilizing HELOCs, cash-out refinances, and even reverse mortgages, instruments that always go away a steadiness on the books into retirement.
Is it unhealthy to retire with a mortgage?
Not inherently. Like most monetary questions, the reply will depend on context, your earnings, belongings, objectives, and whether or not you might have a plan.
When it would make sense:
- Your retirement earnings simply helps the funds
- You’re utilizing the mortgage strategically, corresponding to serving to household or sustaining liquidity
- You’ve got enough residence fairness and diversified retirement belongings
- You’ve got a transparent compensation or debt-reduction technique
When it’s dangerous:
- Mortgage funds pressure your fastened earnings
- You’re dipping into RRSPs or credit score traces to remain afloat
- There’s no finish plan for the debt
- You’re susceptible to rate of interest will increase or shock bills
What are good mortgage methods for retirees
In case you’re approaching retirement with a mortgage, or already in it, there are alternatives to maintain the debt manageable and aligned along with your way of life.
1. Downsize to reset your monetary image
Promoting a big or high-maintenance residence can wipe out your mortgage and release capital. It’s one of the vital efficient methods to enhance money circulation whereas retaining your fairness working for you.
2. Contemplate a reverse mortgage
A reverse mortgage can provide entry to fairness with out month-to-month funds, making it simpler to remain in your house comfortably. It’s not for everybody, however in the suitable case, it gives actual peace of thoughts.
3. Refinance earlier than you retire
In case you’re nonetheless working, you could qualify for higher phrases or an extended amortization, decreasing month-to-month funds and providing you with flexibility as you transition into retirement.
4. Discuss to a mortgage skilled
Don’t go it alone. A mortgage dealer who understands each retirement earnings planning and lending standards may help construction an answer that protects your way of life, and your long-term plans.
The brand new retirement actuality in Canada
The Royal LePage examine makes one factor crystal clear: the times of coming into retirement mortgage-free are fading quick. For at present’s retirees and people developing behind them, the brand new norm includes carrying some degree of debt, and being considerate about how one can handle it.
So ask your self:
- Can your pension or retirement earnings safely cowl your mortgage?
- Are you holding a manageable quantity of debt, or is it limiting your monetary flexibility?
- Have you ever stress-tested your retirement plan for future fee modifications or money circulation shifts?
Retiring with a mortgage isn’t supreme, but it surely’s additionally not a dealbreaker. The bottom line is to go in with eyes extensive open, and a plan that works for your life.
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Final modified: July 18, 2025