There was a time not so very long ago when Canadians nearing retirement would do everything humanly possible to pay off all of their outstanding debt.
The anxiety of still owing money after one’s earning days were over was enough to spur older people to rush to pay off their mortgages and clear out their car payments and credit card balances before calling it a day.
But while paying off debt is still considered a sound strategy as you near the finish line, a new study on the changing landscape of retirement and debt suggests it’s no longer a dealbreaker.
A national online survey of 1,626 Canadians conducted by real estate company Royal Lepage in May 2025 found that only half of Canadians say their mortgage is either paid off or will be by retirement.
A whopping 29 per cent of Canadians who are planning to retire in the next few years say they will “continue to make mortgage payments on their primary residence into retirement.” Compare that number to the 14 per cent of retirees who carried a mortgage into retirement in 2016, or to the eight per cent who did so in 1999.
Today, more older Canadians are bucking the old wisdom and carrying a mortgage – for various reasons.
Why Retirees Are Still Paying Mortgages
The ever-climbing cost of real estate has certainly played a role in their decisions. Some bought their house much later in life and still need a few years to pay it down, while others have borrowed against their homes to pay for expensive renovations or to help their kids to purchase their own dwellings.
More still feel that they can meet the monthly payments without undue strain and have worked mortgage payments into their financial plans.
“In the era of rotary phones and station wagons, burning your mortgage was the economic finish line,” explains Phil Soper, president and CEO of Royal LePage. “Today’s retiree reality is much more nuanced.”
To be clear, paying off your mortgage is not just an outdated way of thinking handed down to us from our penny-pinching forbearers. Entering retirement debt-free gives you more financial flexibility and peace of mind than those who still have to meet monthly mortgage payments. When mortgage rates go up, you probably won’t lie awake all night wondering where that extra money will come from.
Is This a Sound Strategy?
However, if you have invested well or receive a steady stream of retirement income – for example, a defined pension or a spouse who is still working – carrying a manageable mortgage might be a wise strategy.
“Smart retirees think in terms of cash flow, liquidity and flexibility – not just interest rates and balances,” notes Robb Engen, who writes the Boomer&Echo personal finance blog. “But like most blanket financial advice, context matters.”
Of course, Engen isn’t recommending that we should all finance our retirements through debt. Instead, he says that being debt-free remains a sound idea, but that it doesn’t necessarily apply to everyone.
For some near-retirees, he says, the rush to get rid of debt might come at the expense of other investments. And others who put all their money into paying off the mortgage might inadvertently find themselves in a “liquidity trap” where they have no savings for sudden emergencies.
That’s why, when crunching the numbers, some people will find that carrying some debt into retirement is a strategy that works within their own personal financial plan. But for the majority of us, debt elimination remains a worthy goal and should be at the top of every near-retiree’s priority list.
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