Longer lifespans, later retirement and the changing economics of home ownership are leading more Canadians to carry mortgage debt into retirement.
That’s according to a survey conducted by Royal LePage where 29 per cent of Canadians planning to retire this year or next will carry mortgage debt into their golden years.
However, Prince George-based insolvency trustee Leah Drewcock with MNP told Vista Radio some seniors are hoping to cash in late on their homes if prices skyrocket.
“Some seniors are carrying mortgages into retirement by choice. They feel that maybe there is going to be a surge in home prices and maybe they are hanging on to see if their homes are worth more before they sell or downsize while others are waiting to see the economic uncertainty – they are concerned about the higher cost of living.”
“Some may even be supporting grown children who are living at home still so they can’t downsize to a smaller living arrangement. Others have taken out equity loans or re-mortgaged and are unable to pay off their mortgages as soon as estimated.”
While Drewcock understands some of the reasons behind carrying mortgage debt, it cab leave seniors with very little wiggle room to deal with unexpected expenses.
“When you are retired your income is typically fixed, which means there is far less flexibility to manage those unexpected expenses. If you are carrying debt into retirement you can have very little wiggle room to deal with financial shock.”
Royal LePage added 43 per cent of first-time home buyers in Canada were 35 years old or older — up from 33 per cent in 2021.
The average retirement age has also risen fairly steadily: the age was 61.6 in 2000, according to Statistics Canada, and 65.3 in 2024.
Canadians are also living roughl 50 per cent more years after turning 65 compared to their grandparents.
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