In line 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 powerful sign that Canada’s retirement panorama is altering.
So what’s behind this development, and must you be involved if you happen to’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. Primarily based on the Royal LePage research and what we see every day with our shoppers, listed below are the massive drivers:
Homeownership is costlier than ever
Canadian residence costs have climbed considerably over the previous 20 years. Many pre-retirees merely haven’t had sufficient runway to completely 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 cost. Some took out residence fairness loans or refinanced to take action, that means they’re now carrying that debt into retirement.
Retirement timelines are shifting
Almost one-third of soon-to-be retirees mentioned they might think about delaying retirement particularly to handle their mortgage. Others plan to hold the debt and funds accordingly, signalling a rising consolation with retiring whereas nonetheless in reimbursement mode.
Individuals are tapping into residence fairness
Whether or not it’s funding a renovation, masking life-style bills, or offering intergenerational help, many Canadians are utilizing HELOCs, cash-out refinances, and even reverse mortgages, instruments that always go away a stability on the books into retirement.
Is it dangerous to retire with a mortgage?
Not inherently. Like most monetary questions, the reply will depend on context, your revenue, belongings, targets, and whether or not you might have a plan.
When it would make sense:
- Your retirement revenue simply helps the funds
- You’re utilizing the mortgage strategically, resembling serving to household or sustaining liquidity
- You have got ample residence fairness and diversified retirement belongings
- You have got a transparent reimbursement or debt-reduction technique
When it’s dangerous:
- Mortgage funds pressure your mounted revenue
- You’re dipping into RRSPs or credit score traces to remain afloat
- There’s no finish plan for the debt
- You’re weak to rate of interest will increase or shock bills
What are good mortgage methods for retirees
When you’re approaching retirement with a mortgage, or already in it, there are alternatives to maintain the debt manageable and aligned along with your life-style.
1. Downsize to reset your monetary image
Promoting a big or high-maintenance residence can wipe out your mortgage and liberate capital. It’s one of the vital efficient methods to enhance money stream whereas holding your fairness working for you.
2. Take into account a reverse mortgage
A reverse mortgage can supply 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 best case, it gives actual peace of thoughts.
3. Refinance earlier than you retire
When you’re nonetheless working, you could qualify for higher phrases or an extended amortization, reducing month-to-month funds and supplying you with flexibility as you transition into retirement.
4. Speak to a mortgage skilled
Don’t go it alone. A mortgage dealer who understands each retirement revenue planning and lending standards can assist construction an answer that protects your life-style, and your long-term plans.
The brand new retirement actuality in Canada
The Royal LePage research makes one factor crystal clear: the times of coming into retirement mortgage-free are fading quick. For right now’s retirees and people developing behind them, the brand new norm includes carrying some degree of debt, and being considerate about methods to handle it.
So ask your self:
- Can your pension or retirement revenue 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 stream shifts?
Retiring with a mortgage isn’t splendid, however it’s additionally not a dealbreaker. The secret is to go in with eyes broad open, and a plan that works for your life.
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Final modified: July 18, 2025
