Advice | I am about to retire but I still have a mortgage. Am I suffering?

With today’s real estate prices, Canadians are buying homes later in life than ever before.

That means some people are facing a problem not often seen in previous generations: They still have years left on the mortgage when they retire.

According to financial planner Dan Hallett, in a perfect world, people would have no mortgages left to pay by the time they retire.

“It’s definitely not good,” said Hallett, vice president of HighView Financial.

Despite the recent downturn in the real estate market, it still takes a long time to save up for a down payment, and it takes a larger portion of people’s income to pay for it. the mortgage than before, said Hallett.

“Twenty-five years ago, you could set aside a portion of your money to save for your retirement and be able to pay your mortgage,” Hallett said. people who really choose and prioritize.”

But he added, it’s not a problem if you haven’t paid off your mortgage before you retire.

If you have good retirement savings, no major debt, and only a year or two left on your mortgage, you’ll probably be fine. If you have 10 or 15 years of mortgage payments to go, you may need to readjust your needs, says Hallett.

Cheap in numbers


Months required to save for a down payment on a non-condo in Toronto.


Average household income required to afford a non-condo home in Toronto.


Months needed to save for a down payment on a home in Toronto.


Average household income required to afford a home in Toronto.

Source: National Bank Housing Affordability Monitor

“There are situations that are not a big deal, and situations that are a big burden, to hang. There’s a spectrum,” Hallett said, advising people to consider downsizing, whether from owning a home to renting, or renting. “People shouldn’t dismiss renting as an option. .”

Doing an honest analysis of your finances as soon as possible can also help to avoid an unexpected, nasty surprise, the added Hallett. Figuring out how often you can travel, eat out, or how much money you have for household expenses is important.

“In the end it comes down to having realistic expectations,” Hallett said. “Sometimes people don’t have a real expectation of where they’re going to retire.”

Another option that many people should consider as they near retirement, says financial planner Jason Heath, is giving up the big city life. Selling a house in Toronto, and moving to a smaller town or another province can take care of any mortgage debt and give people a better life in retirement.

“People at their best are people who can move to another city, or another province … outside of the big cities,” said Heath, managing director at Objective Financial Partners.

But, adds Heath, it’s not an option for everyone. Being in the same group as your children, grandchildren and friends is non-negotiable for some people, and the equation changes as we get older, Heath said.

“It’s one thing for a 40-year-old to say ‘when I retire, I’m going to x, y or z.’ It’s a whole other thing when you’re 60 or 65 and you have children and grandchildren and friends in the same city.”


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