In response to a 2024 Royal LePage survey, 30% of Canadians planning to retire within the subsequent two years count on 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 do you have to 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 house values, later-life borrowing, and altering retirement expectations is reshaping what retirement seems like in Canada. Based mostly on the Royal LePage research and what we see day by day with our shoppers, listed below are the large drivers:
Homeownership is costlier 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 in the course of the low-rate period.
Many Canadians are serving to their youngsters
Royal LePage discovered that 48% of Canadians aged 55+ who’ve kids say they’ve helped them financially, usually with a down fee. 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
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 house fairness
Whether or not it’s funding a renovation, overlaying way of life bills, or offering intergenerational help, many Canadians are utilizing HELOCs, cash-out refinances, and even reverse mortgages, instruments that usually go away a steadiness on the books into retirement.
Is it dangerous to retire with a mortgage?
Not inherently. Like most monetary questions, the reply relies on context, your earnings, property, targets, and whether or not you’ve a plan.
When it’d make sense:
- Your retirement earnings simply helps the funds
- You’re utilizing the mortgage strategically, comparable to serving to household or sustaining liquidity
- You’ve enough house fairness and diversified retirement property
- You’ve 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 strains 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 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 way of life.
1. Downsize to reset your monetary image
Promoting a big or high-maintenance house can wipe out your mortgage and unencumber capital. It’s one of the efficient methods to enhance money circulation whereas preserving 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 correct case, it provides 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, reducing 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 broker who understands each retirement earnings planning and lending standards will 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 research makes one factor crystal clear: the times of getting into retirement mortgage-free are fading quick. For right now’s retirees and people developing behind them, the brand new norm entails carrying some stage 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 charge adjustments or money circulation shifts?
Retiring with a mortgage isn’t very best, however it’s additionally not a dealbreaker. The bottom line 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
