More homeowners retiring with a mortgage

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Home price appreciation over the past 25 years described as a “double-edged sword” for today’s retirees

Three in 10 Canadians who plan to retire this year or next will carry a mortgage on their primary residence into retirement, while 47 per cent of those nearing retirement don’t plan to downsize within two years of ending full-time employment.

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Those findings of a recent Royal LePage survey conducted by Leger paint a picture that’s starkly different from previous generations.

For starters, the trend of carrying a mortgage into retirement appears to be growing, with just half as many senior households carrying mortgage debt compared to a decade ago.

According to Statistics Canada, 14 per cent of households with income earners aged 65 and over had a mortgage in 2016, up substantially from eight per cent in 1999.

Meanwhile, 45 per cent of survey respondents say their mortgage is currently paid off, while another six per cent say their mortgage will be paid off before retirement.

Royal LePage President and CEO Phil Soper describes home price appreciation over the past 25 years as a “double-edged sword” for today’s retirees. “

On one hand, it has delivered unprecedented financial gains,” he says. “On the other, this generation is far more likely to have carried mortgage balances that would have been unimaginable to their parents or grandparents.”

According to Royal LePage research, they’re also more likely to have provided financial assistance to their children to help them buy a home. While previous generations may have viewed mortgage-free retirement as the “only option,” today’s retirees tend to be more “open-minded,” Soper notes.

“Traditional employment income may have dried up, but many are still comfortably managing their expenses and servicing mortgage payments with income from investments, part-time work or a working spouse.”

That picture the survey paints is different from previous generations in other ways as well. For one, the average age of retirees in Canada has been increasing gradually, from 64.3 in 2020 to 65.3 in 2024. At the same time, Canadians are entering the housing market later, increasing the odds of future generations of retirees carrying a mortgage further into retirement.

“Compared to their grandparents, today’s retirees are enjoying about fifty per cent more years after turning 65,” Soper says. “They’re working longer, staying active and in many ways, continuing the lives they led during their working years – just without the job. It’s no surprise their attitudes toward home ownership have evolved with the times. With people buying their first homes later and working longer, it’s increasingly common for Canadians to carry a mortgage well into retirement, often by choice rather than necessity.”

Of those Royal LePage experts who say a majority of people nearing or entering retirement are downsizing, 43 per cent say that standard condominiums are the most popular property type among this cohort, followed by adult living communities that cater to those aged 55 and up (25 per cent) and detached properties (16 per cent).