Mortgage payments in retirement? Why more retirees are still paying off their home as they exit the workforce

Retirement marks an exciting new chapter for many Canadians, one filled with more personal time, the freedom to explore new interests, and possibly travel. For homeowners, it has traditionally also meant making the final payment on the family property and entering retirement mortgage-free. However, for a growing number of Canadians, that milestone is no longer a given.

A recent Royal LePage survey, conducted by Leger,1 suggests a new housing reality for older Canadians is taking shape. According to the survey, nearly three in ten Canadians (29%) who are planning to retire in 2025 or 2026 say they will continue to make mortgage payments on their primary residence into retirement. The trend seems to be accelerating, as affordability continues to challenge Canadians of all ages: only half as many senior households had mortgage debt approximately ten years ago. According to Statistics Canada, 14% of households with income earners aged 65 and over had a mortgage in 2016, up significantly from eight per cent in 1999.2

“The benefits of entering retirement as a homeowner with a paid-off mortgage are clear: more disposable income, insulation from interest rate changes, and even the emotional security that comes from knowing you’ll always have a place to live. In the era of rotary phones and station wagons, burning your mortgage was the economic finish line. Today’s retiree reality is much more nuanced,” said Phil Soper, president and CEO, Royal LePage. 

Click Here to Continue Article