Retiring with or without a mortgage: Affordability a challenge for Canadians of all ages
While many may consider retirement a sign of freedom, some say today's reality tells a different story, Noovo Info reports.
According to a recent Royal LePage survey, conducted by Léger, three out of 10 Canadians who plan to retire in 2025 or 2026 say they will continue to pay their mortgages once they retire.
Ten years ago, half of senior households had mortgage debt, according to Statistics Canada data highlighted by Royal LePage.
In 2016, 14 per cent of income households with occupants 65 and older had a mortgage, a significant increase from eight per cent in 1999.
'The benefits of entering retirement as a homeowner who has paid off their mortgage are clear: more disposable income, protection from interest rate fluctuations, and even the emotional security of knowing you'll always have a place to live,' said Phil Soper, president and CEO of Royal LePage.
He explains that real estate price appreciation over the last 25 years has been 'a double-edged sword' for today's retirees.
'On one hand, it has led to unprecedented financial gains. On the other hand, this generation is much more likely to have mortgage balances that would have been unimaginable compared to their parents or grandparents,' he said. 'Our research confirms that they are also much more likely to have to provide financial assistance to their children to help them buy their own homes.'
Soper says he also believes that while previous generations saw mortgage-free retirement as the only option, today's retirees are much more open-minded.
'While traditional employment income may have dried up, many are still able to comfortably manage their expenses and pay off their mortgages, thanks to income from investments, part-time work or a working spouse,' he said.
The data also show that Canadians are becoming homeowners at a later age, increasing the likelihood that future generations of retirees will continue to hold their mortgages.
A Royal LePage report published in 2023 showed that 24 per cent of first-time homebuyers were under the age of 30, while 33 per cent were between 30 and 34, and 43 per cent were 35 and up.
By comparison, the same survey in 2021 shows 33 per cent of respondents were aged 35 or over, 'which clearly shows that first-time home buyers are buying later in life,' notes Royal LePage.
Statistics Canada data also show that the average retirement age in the country has gradually increased
It was 65.3 in 2024, compared to 64.3 in 2020.
'Compared to their grandparents, today's retirees are working longer, staying active and, in many ways, continuing the life they led during their working years, but without the work,' said Soper. 'Their attitude to home ownership has changed over time. As people buy their first home later and work longer, it is increasingly common for Canadians to hold onto a mortgage until retirement, often by choice rather than necessity.'
Stay or go?
According to responses to a recent Royal LePage survey, Canadians are also sharply divided on whether they want to move to smaller houses in retirement or stay put.
In Quebec and Ontario, the majority of respondents indicated that they preferred to remain in their current homes upon retirement.
Conversely, in Manitoba and Saskatchewan, the majority of respondents said that they want to move to a smaller space when they retire.
In Alberta, respondents were equally divided between the two options.
'Reducing the size of your home in retirement is far from a certainty,' said Soper. 'For many homeowners, the decision to stay where they are or move to a smaller property is influenced by a combination of economic realities, lifestyle needs and personal attachments.'
Some retirees say they see a smaller home as a practical and liberating choice with less upkeep, more cash to travel or support their children's home ownership journeys; others say they see no reason, either financial or practical, to part with their home.
The online survey of 1,626 Canadians aged 18 and up was conducted between May 2 and May 4, 2025, using Leger's online panel.
The online panel has approximately 400,000 members nationwide and a 90 per cent retention rate.
A probability sample of the same size would give a margin of error of +/- 2.4 per cent, 19 times out of 20.
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