Statistics Canada reported 1.5 million people older than 65 had a mortgage in 2021. This was an increase from 1.2 million during the previous five years.
Rising interest rates will make paying off a mortgage more difficult so it is understandable that the trend for more seniors to have a mortgage will continue. That will put added pressure on their ability to retire in comfort.
A survey conducted by Angus Reid during 2022 found that 40 per cent had either delayed retirement or planned to delay retirement because they had too much debt.
Homeownership has always been a priority for many Canadians. Now those houses are much more expensive and mortgage interest rates are significantly higher.
In just a few short years the arithmetic of retirement is getting more difficult. This is a time for creative thinking.
There are several options to consider. Sell your current house and buy another less expensive in order to eliminate your mortgage debt.
Consider sharing your accommodation. This could include a younger generation family member that would be able to contribute to household expenses including mortgage payments.
Share your home and expenses with a friend. Depending on the layout of your house is there an opportunity for you to rent to a stranger?
There are several options that will have both advantages and disadvantages.
Managing personal finances is important during all stages of your life.
These are challenging times for seniors. We encourage you to evaluate your financial position and if changes are needed, make those changes.
Peter Watson is registered with Aligned Capital Partners Inc. (ACPI) to provide investment advice. Investment products are provided by ACPI. ACPI is a member of the Investment Industry Regulatory Organization of Canada. The opinions expressed are those of the author and not necessarily those of ACPI. Only investment-related products and services are offered through Watson Securities of ACPI. Peter Watson provides wealth management services through Watson Investments. He can be reached at www.watsoninvestments.com
