Based on 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 pattern, and must you be involved when you’re heading into retirement with a mortgage?
Why are extra Canadians retiring with mortgage debt?
A mixture of rising house 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 day by day with our purchasers, listed below are the massive drivers:
Homeownership is dearer than ever
Canadian house 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 cost. Some took out house 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 stated they might take into account delaying retirement particularly to handle their mortgage. Others plan to hold the debt and price range accordingly, signalling a rising consolation with retiring whereas nonetheless in compensation mode.
Individuals are tapping into house fairness
Whether or not it’s funding a renovation, protecting life-style bills, or offering intergenerational help, many Canadians are utilizing HELOCs, cash-out refinances, and even reverse mortgages, instruments that usually 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 depends upon context, your earnings, property, objectives, and whether or not you’ve gotten a plan.
When it’d 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 house fairness and diversified retirement property
You’ve got a transparent compensation or debt-reduction technique
When it’s dangerous:
Mortgage funds pressure your mounted 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 sensible 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 house can wipe out your mortgage and unlock capital. It’s one of the crucial efficient methods to enhance money stream whereas maintaining your fairness working for you.
2. Think about 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 suitable case, it affords actual peace of thoughts.
3. Refinance earlier than you retire
When you’re nonetheless working, chances are you’ll qualify for higher phrases or an extended amortization, decreasing 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 earnings planning and lending standards might help 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 at this time’s retirees and people arising behind them, the brand new norm includes carrying some degree of debt, and being considerate about the best way to 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 adjustments or money stream shifts?
Retiring with a mortgage isn’t ideally suited, but it surely’s additionally not a dealbreaker. The hot button is to go in with eyes extensive open, and a plan that works to your life.
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Final modified: July 18, 2025
