According to a 2024 Royal LePage survey, 30% of Canadians planning to retire in the next two years expect to carry mortgage debt into retirement, up from just 14% in 2016. That’s a dramatic shift in less than a decade, and a strong signal that Canada’s retirement landscape is changing.
So what’s behind this trend, and should you be concerned if you’re heading into retirement with a mortgage?
Why are more Canadians retiring with mortgage debt?
A combination of rising home values, later-life borrowing, and changing retirement expectations is reshaping what retirement looks like in Canada. Based on the Royal LePage study and what we see daily with our clients, here are the big drivers:
Homeownership is more expensive than ever
Canadian home prices have climbed significantly over the past 20 years. Many pre-retirees simply haven’t had enough runway to fully pay off their mortgages, especially if they bought later in life or refinanced during the low-rate era.
Many Canadians are helping their kids
Royal LePage found that 48% of Canadians aged 55+ who have children say they’ve helped them financially, often with a down payment. Some took out home equity loans or refinanced to do so, meaning they’re now carrying that debt into retirement.
Retirement timelines are shifting
Nearly one-third of soon-to-be retirees said they would consider delaying retirement specifically to manage their mortgage. Others plan to carry the debt and budget accordingly, signalling a growing comfort with retiring while still in repayment mode.
People are tapping into home equity
Whether it’s funding a renovation, covering lifestyle expenses, or providing intergenerational support, many Canadians are using HELOCs, cash-out refinances, or even reverse mortgages, tools that often leave a balance on the books into retirement.
Is it bad to retire with a mortgage?
Not inherently. Like most financial questions, the answer depends on context, your income, assets, goals, and whether you have a plan.
When it might make sense:
- Your retirement income easily supports the payments
- You’re using the mortgage strategically, such as helping family or maintaining liquidity
- You have sufficient home equity and diversified retirement assets
- You have a clear repayment or debt-reduction strategy
When it’s risky:
- Mortgage payments strain your fixed income
- You’re dipping into RRSPs or credit lines to stay afloat
- There’s no end plan for the debt
- You’re vulnerable to interest rate increases or surprise expenses
What are smart mortgage strategies for retirees
If you’re approaching retirement with a mortgage, or already in it, there are options to keep the debt manageable and aligned with your lifestyle.
1. Downsize to reset your financial picture
Selling a large or high-maintenance home can wipe out your mortgage and free up capital. It’s one of the most effective ways to improve cash flow while keeping your equity working for you.
2. Consider a reverse mortgage
A reverse mortgage can offer access to equity without monthly payments, making it easier to stay in your home comfortably. It’s not for everyone, but in the right case, it offers real peace of mind.
3. Refinance before you retire
If you’re still working, you may qualify for better terms or a longer amortization, lowering monthly payments and giving you flexibility as you transition into retirement.
4. Talk to a mortgage professional
Don’t go it alone. A mortgage broker who understands both retirement income planning and lending criteria can help structure a solution that protects your lifestyle, and your long-term plans.
The new retirement reality in Canada
The Royal LePage study makes one thing crystal clear: the days of entering retirement mortgage-free are fading fast. For today’s retirees and those coming up behind them, the new norm involves carrying some level of debt, and being thoughtful about how to manage it.
So ask yourself:
- Can your pension or retirement income safely cover your mortgage?
- Are you holding a manageable amount of debt, or is it limiting your financial flexibility?
- Have you stress-tested your retirement plan for future rate changes or cash flow shifts?
Retiring with a mortgage isn’t ideal, but it’s also not a dealbreaker. The key is to go in with eyes wide open, and a plan that works for your life.
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Last modified: July 18, 2025