While previous generations aspired to enter retirement unburdened by housing debt, a growing share of Canadian retirees are facing a different reality. A new Royal LePage–Leger survey of 1,626 adults, conducted found that 29 per cent—or nearly one in three Canadians planning to retire in the next two years—expect to still be paying a mortgage when they stop working. Mortgage‑free retirement? Not so for 29% of soon‑to‑be retirees (Global News)
Key Findings
Still paying mortgages: 29 percent of near‑retirees (spring 2025) anticipate entering retirement with ongoing mortgage obligations biv.com.
Mortgage‑free cohort: 45 percent have already paid off their mortgage, with another 6 percent confident they’ll clear it before retiring.
Homeownership later in life: Canadians are buying homes later, with amortization schedules (often 30 years) pushing mortgage payoffs well into traditional retirement years globalnews.ca.
Rising mortgage debt among seniors: Canadian seniors with mortgages doubled from 14 percent in 2016 to roughly 28 percent by 2025.
Split on downsizing: Approaching retirees are divided—46 percent plan to downsize within two years of retiring, while 47 percent intend to stay put.
Why the Shift?
Phil Soper, CEO of Royal LePage, points to housing affordability pressures as a major factor. Escalating home prices, delayed entry into ownership, and financial support extended to adult children have stretched mortgage timelines. While the payoff represents financial liberation and stability, this generation is redefining retirement realities.
How Retirees Are Coping
Despite the odds, many are finding ways to manage:
Supplemental income sources: Investment earnings, part‑time employment, or support from a working spouse are helping bridge monthly payments .
Financial planning strategies: Advisors suggest delaying Canada Pension Plan withdrawals (until age 70), tapping into investments prudently, or pairing mortgage debt with diversified retirement funding.
Bigger Picture: Canada’s Housing Crisis
The trend reflects broader affordability challenges. The Bank of Canada's housing affordability index reached its worst since 1982, with average homes costing over nine times annual household incomes in 2023. Although interest rates have declined, high prices persist, hampering homeownership .
What It Means for You
Plan for mortgage payments into retirement: If you’re close to normal amortization timelines, build mortgage payments into your budget after leaving the workforce.
Delay CPP to maximize income: Eating into your investment portfolio to pay the mortgage may backfire—waiting until age 70 to draw CPP can significantly boost monthly income.
Downsizing: Pros and Cons: Downsizing can reduce expenses and help pay off your mortgage—but only if you weigh factors like moving costs, emotional ties, and future home equity needs.
Consider equity-based solutions: Reverse mortgages (e.g., offered by HomeEquity Bank) allow Canadians 55+ to access home equity without monthly repayments. They can be an option—but total interest may reduce estate value.
What was once a cornerstone milestone—mortgage‑free retirement—has become an increasingly elusive goal. Nearly one-third of near‑retirees now carrying mortgage debt reflects deeper housing affordability issues. But smart financial planning, diversified income strategies, and an openness to options like downsizing or equity loans can help mitigate risks and preserve stability in retirement.
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