According to a 2024 Royal Leprosy Survey, 30% of Canadians who plan to retire in the next two years want to bring their mortgage debt to retire, which is 14% in 2016. This is a huge shift in less than a decade and a strong signal that the Canadian retirement landscape is changing.
So, what is behind this trend, and should you worry if you are going to mortgage your retirement?
Why are more Canadians retired due to mortgage debt?
The combination of rising home values, later borrowing and changing retirement expectations are reshaping Canada’s retirement look. Based on Royal Leprosy research and what we see with our clients every day, here is a big driving force:
House ownership more than ever
House prices in Canada have risen sharply over the past 20 years. Many retirees simply don’t have enough runways to fully repay mortgages, especially if they buy later or refinance in the era of low interest rates.
Many Canadians are helping their children
Royal Lepage found that 48% of Canadians over 55 with children say they often provide financial assistance to them financially, often through down payments. Some people take out net worth loans or refinancing them, which means they are now bringing debt to retirement.
Retirement schedule is shifting
Nearly one-third of the upcoming retirement said they would consider delaying their retirement to manage mortgages. Others plan to assume debt and budget accordingly, indicating an increasing comfort when retirement while still in repayment mode.
People are using their home net assets
Whether it’s funding renovations, paying for lifestyle fees or providing intergenerational support, many Canadians are using HELOC, cash out, or even reverse mortgages, tools that often bring balanced retirement on books.
Is a retirement mortgage bad?
Not born. Like most financial questions, the answer depends on the context, income, assets, goals, and whether you have plans.
When does it make sense:
- Your retirement income is easy to support payment
- You are using a mortgage strategically, such as helping a family or maintaining liquidity
- You have enough home equity and diversified retirement assets
- You have a clear repayment or debt reduction strategy
When risk:
- Mortgage loans to pay for your fixed income
- You are immersing in RRSP or credit line to stay alive
- The final plan without debt
- You are vulnerable to rising interest rates or surprise fees
What is the smart mortgage strategy for retirees
If you are retired on a mortgage or already on a mortgage, you have the option to keep your debt managed and aligned with your lifestyle.
1. Reduce size to reset your financial situation
Selling large or high maintenance homes can eliminate your mortgage and free up capital. This is one of the most effective ways to improve cash flow while keeping equity working for you.
2. Consider reverse mortgage
Reverse mortgages can provide equity without monthly payments, making it easier to stay at home comfortably. It’s not everyone’s, but in the right situation, it provides real peace of mind.
3. Refinancing before retirement
If you are still working, you may be eligible for better terms or longer amortization, reduce monthly payments and flexibility when transitioning to retirement.
4. Talk to mortgage professionals
Don’t go alone. A mortgage broker who understands retirement income plans and loan standards can help build solutions that protect your lifestyle and your long-term plans.
Canada’s new retirement reality
Royal Leprosy studies have made Crystal clear: the days of entering retirement mortgages are quickly disappearing. For today’s retirees and later retirees, the new norm involves taking on a certain level of debt and considering how to manage it.
So ask yourself:
- Can your pension or retirement income safely cover your mortgage?
- Do you hold a lot of debt, or do you limit your financial flexibility?
- Have you stressed your retirement plan to achieve future interest rate changes or cash flow transfers?
Retirement mortgage is not ideal, but it is not a deal-breaker either. The key is to keep your eyes wide and go in, a plan your Life.
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Last modified: July 18, 2025
