Key Takeaways:
- Why more Canadians are heading into retirement with mortgages—and why it’s not a bad thing.
- How to handle mortgage payments in your golden years without stress.
- Ways to actually grow your wealth instead of obsessing over paying down debt.
- Helpful tools to build a flexible, modern retirement plan.
- Tips for feeling in control of your finances—even with a mortgage on the books.
Rethinking Retirement in Canada
Once upon a time in Canada, the retirement dream was simple: own a home, pay it off, retire debt-free. Sounds nice, right? But that image is fading. More Canadians are realizing that wiping out a mortgage before retiring isn’t always necessary—or even the smartest play.
Roughly 30% of Canadians nearing retirement expect to still have mortgage payments. And no, they’re not panicking. Instead, they’re reimagining retirement—but with a modern twist. Priorities are shifting from “get rid of all debt” to things like cash flow, flexibility, and keeping options open.
Why the shift? Let’s face it—home prices have soared, mortgages can now stretch over longer terms, and for many, life unfolds differently than planned. Some are helping their kids buy homes, others prefer to hold onto cheap mortgage rates and invest instead.
The takeaway? Being mortgage-free isn’t the one-size-fits-all retirement goal it used to be. Today’s savvier approach looks more like balancing manageable debt with smart investing and a well-stocked emergency fund. This blog is here to offer context, options, and encouragement. Whether you’re in your 30s planning ahead or just curious where you stand, you’ll find ideas to make your retirement work for your life—not someone else’s ideal.
You’re not falling behind. You’re simply navigating things on your own terms. And honestly? That’s what financial freedom should look like.
Why More Canadians Are Retiring with a Mortgage
Not so long ago, the dream was clear: say goodbye to the 9-to-5, and goodbye to your mortgage, too. But scroll to 2025 and things look a little different. It turns out a growing number of Canadians—about one in three, by some estimates—are planning to retire while still making mortgage payments. And for many, that’s not a setback. It’s a real-life reflection of how things have changed.
A big part of this shift comes down to timing. People are buying their homes later—maybe in their late 30s or 40s. With mortgages spanning 25 or even 30 years, yeah, you’ll likely still be making payments when you hit 65. And that’s okay.
Another factor? Family. A lot of parents are tapping their home equity to help their adult kids buy homes. Whether through second mortgages or refinancing, it’s common—and generous. But it does affect your own finances down the road.
In the past, retirement was all about being debt-free. Now, it’s more about managing money wisely. Keeping monthly costs low, being comfortable, and staying flexible matters more than hitting some idealized goal. After all, retiring with a reasonable mortgage, a strong savings plan, and a solid roof over your head can beat being house-rich but cash-poor.
So if you’re looking at your mortgage and wondering if you’re off track—don’t. You’re part of a growing number of Canadians choosing stability and freedom over striving for a debt-free trophy. And that’s perfectly okay.
The Case for Keeping a Mortgage in Retirement
For decades, the “no debt by 65” mantra echoed throughout Canadian households. Retirement planners everywhere were singing the same tune. But the playbook’s changing—and more people are finding that keeping a mortgage isn’t just acceptable, it can actually be… smart.
This way of thinking goes by the term “strategic debt.” Sounds fancy, but it’s really just about using debt to your advantage. If you’ve got a low-interest mortgage, and your investments are earning more than that in returns—why rush to pay it off?
Holding onto a mortgage can give you some breathing room. Let’s say you’re sitting on a chunk of savings, and you’re tempted to drop it all on your mortgage. What if an emergency pops up? What if you want to take a dream vacation, or help out a loved one? Liquid cash gives you options. A paid-off house doesn’t pay for groceries.
Plus, mortgage payments—especially fixed-rate ones—offer predictability. In retirement, stable monthly expenses are pure gold. You know what to expect, plan around it, and move on with your life.
Sure, it sounds strange keeping a mortgage by choice. But with some calculation and confidence, it can lead to a smoother retirement. It’s not about being reckless—it’s about being practical with the tools available.
Bottom line: debt isn’t the enemy. Panic-driven financial decisions are. A mortgage, handled wisely, might just be your ticket to financial flexibility and peace of mind.
Mortgage vs. Rent – Choosing Stability in an Uncertain Market
Let’s say you’re heading toward retirement and wondering: is it better to rent or carry that mortgage a little longer? It’s a fair question—especially in Canada’s unpredictable housing market.
On one hand, renting might seem easier. Less upkeep, more flexibility. But rents are rising fast, and many cities are seeing double-digit percentage hikes. You’ve also got to worry about moving every few years if your landlord decides to sell or raise the rent beyond comfort. Not ideal when you’re trying to relax in retirement.
Homeownership, even with a mortgage, offers a different kind of peace. Fixed-rate mortgages lock in predictable monthly payments, usually for years at a time. That makes financial planning in retirement a heck of a lot easier. And let’s not forget—you’re building equity, not just handing money over to a landlord.
When the mortgage is gone? You own the place, free and clear. No rent, no sudden eviction notices, no moving boxes in your golden years. Plus, owning protects you from inflation in a way renting simply can’t. As everything else gets more expensive, that fixed mortgage payment starts looking better every year.
So while renting may seem like a lighter load, a mortgage gives you control and long-term stability in a world full of unknowns. That’s worth quite a bit—especially when peace and predictability matter most.
Cash Flow is King – Why Liquidity Matters in Retirement
Let’s talk about a word that doesn’t come up often enough: liquidity. Not the flashiest term, but trust me—it’s key to feeling secure and free in retirement. Liquid money is accessible money. And that’s a big deal when life throws curveballs—or opportunities.
Picture this: you’ve worked your whole life, stashed away savings, and now you’re finally ready to relax. Then your roof needs repairs, or your grandkid needs help with college, or you finally get the chance to take that dream trip. If all your money’s tied up in your house? You’re stuck. But if you chose to keep a low-interest mortgage with manageable payments, you’re in a better spot. You’ve got options—because your cash isn’t all sunk into your home.
This is where paying off your mortgage early can backfire. If your mortgage rate is just 2-3%, and your investments are growing at 6%? You’re probably better off letting the mortgage ride and putting your money to work elsewhere. It’s a matter of opportunity cost—the money you lose by missing out on better financial moves.
Cash flow gives you freedom to experience life. You’re not living to pay down a house; your money is helping you actually enjoy retirement. So forget the guilt about not “eliminating debt.” Focus instead on making smart, flexible financial choices. Having a little mortgage left isn’t a failure. It’s a strategy—and a pretty smart one at that.
Mortgage Options for a Flexible Retirement
Think you’re stuck with the mortgage you have now? Think again. There are more tools than ever to help you manage your payments—and your lifestyle—as you move into retirement.
One method that’s gaining traction: extending your amortization period. Instead of rushing to pay off your mortgage over 20 years, why not stretch it to 30 or even 35? Your monthly payments shrink, giving you more flexibility to handle life’s surprises (or just enjoy a vacation or two).
You should also take a look at refinancing. If your home’s value has gone up, you might be sitting on significant equity. Tapping into that cash through refinancing could help with investing, family support, or unexpected expenses. Just make sure the math works in your favor before making any moves.
For Canadians aged 55 and over, reverse mortgages are another option worth exploring. They let you access your home’s value without having to make monthly payments. That frees up cash without forcing you to sell and move. It’s not for everyone, but for those who want to stay put and need some extra breathing room, it can be a game-changer.
The key is to explore what fits your life. No two retirements look the same, and your mortgage shouldn’t be a stumbling block. With the right tools, it can actually support and enhance your retirement journey.
Investing While Carrying a Mortgage – Finding Your Balance
Still have a mortgage but thinking about growing your money too? Good news—you don’t have to choose one or the other. In fact, Canadians in their 30s and 40s are proving that you can invest and manage a mortgage at the same time. It’s just about balance.
Savvy homeowners are contributing to RRSPs and TFSAs without skipping their mortgage payments. Why? RRSPs lower your tax bill now and give you retirement income later. TFSAs? No taxes on the growth, and you can pull money out whenever you need it. Flexible and smart.
Some folks are even diving into Mortgage Investment Corporations (MICs). These are investment groups that lend money out as mortgages and typically offer solid returns. Imagine earning 6% on an MIC while paying 3% interest on your own mortgage. That’s money working smarter, not harder.
This dual-track strategy—paying down debt while growing wealth—gives you multiple paths toward financial freedom. The secret isn’t in picking just one route. It’s in taking small, consistent steps that make your overall plan stronger.
So if someone tells you to eliminate all debt before thinking about investing—thank them and then do what works best for your goals. Because real financial security isn’t about tunnel vision. It’s about building a future that’s strong on all sides.
Emotional and Psychological Side of Carrying a Mortgage
Let’s not pretend money is just numbers. It’s emotions, too. And nothing stirs up feelings like carrying debt into retirement. For many of us, there’s a deeply rooted belief that a mortgage-free retirement is the financial finish line. But is it really?
That old-school mentality is still out there. Friends or family might raise eyebrows if you decide to keep your mortgage past 65. But listen—things have changed. Prices are different. Lifestyles are different. Retirement isn’t just about what you owe—it’s about how you live.
Choosing to keep a mortgage doesn’t mean you failed. It means you made a thoughtful decision, one that allowed you to support your kids, invest wisely, or just keep some financial cushion in case life throws a punch. Experts like Phil Soper have said it plainly: strategic debt can actually be a smart move in today’s world.
But sure, emotions creep in. Guilt, doubt, comparison—it’s all real. Just remember that your mortgage doesn’t define your financial health. Your planning, your peace of mind, and your ability to adapt? That’s the stuff that matters.
Shed the shame. Financial security doesn’t look like it did twenty years ago. And that’s a good thing. You’re doing what’s right for you—and that’s what really counts.
What You Can Do Now to Prepare
If you’re in your 30s or 40s, you’ve got an advantage: time. Planning early means you won’t be caught off guard later. A mortgage in retirement might be part of your future—and that’s not a flaw in your plan. It could actually be one of its smartest features.
Step one? Look at your current mortgage. What’s your rate? How long left on the term? Would refinancing help you save today or lower your payments in retirement? Ask questions and explore options.
Next, protect yourself with a safety buffer. Aim to save at least 3–6 months of living expenses. Think of it as grown-up peace of mind. And while you’re at it, make sure you’ve got decent life and disability insurance. Just in case.
This is also a good time to think about additional income streams. TFSAs and RRSPs are a great start. Rental properties or MICs? Worth considering—especially if you like the idea of income that doesn’t require you to clock in anywhere.
And if none of this feels crystal clear? That’s fine. Find a financial advisor who gets both mortgages and retirement planning. They’ll help make sense of the numbers and the goals.
The truth? A mortgage doesn’t have to be a problem to solve. With the right strategy in place, it’s just another part of your wealth-building toolkit.
You’re the Architect of Your Retirement
So here we are. If there’s one takeaway, it’s this: carrying a mortgage into retirement isn’t a glitch in the plan—it can be the plan.
The old rulebook said “no debt after 65.” But today’s reality is more nuanced. Financial freedom doesn’t mean zero debt—it means the freedom to choose what works for you. And maybe that means investing instead of paying down your house. Or refinancing to smooth out cash flow. Or keeping a small mortgage for stability while you do the things that actually bring you joy.
You’re not locked into one model of success. You get to decide—and design—a retirement that reflects your priorities. Flexibility, liquidity, stability, growth… these are your building blocks now, not just a “paid-off house” trophy.
Start small. Get curious. Run the numbers. Talk to someone who knows their stuff. Most of all, don’t let outdated advice stop you from creating the life you want after your work years wind down.
Here’s a simple question to leave you with: What if keeping your mortgage is actually the key to your best retirement?
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