Photo: James Bombales
For years, experts have argued about whether or not Canadian household debt levels are too high. Now they’ll have a new stat to consider, because according to a recent report, more and more Canadians are carrying mortgage debt into retirement
According to a report from Sun Life Financial, 20 per cent of Canadians are still making mortgage payments in retirement.
“From living with a mortgage to unpaid credit cards, retirees can find themselves facing financial challenges in their golden years,” reads the report, which speculates that a “worry-free retirement may be a thing of the past.”
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The report also found that among senior-led families, 14 per cent held a mortgage, a huge spike from 7.7 per cent in 1999.
Similarly, recent census data revealed that only 58 per cent of families led by seniors were debt-free in 2016, compared to 72.6 per cent in 1999.
According to Ontario’s Financial Accountability Office, household debt has grown by an average of 5.6 per cent since 2010, indicating that years of historically low interest rates could be to blame for Ontarians’ high levels of debt.
But not everyone agrees that carrying a mortgage into retirement is a problem. According to Mortgage Professionals Canada chief economist Will Dunning, plenty of retirees are able to manage mortgage debt in a responsible fashion.
“If people in retirement are struggling to make a mortgage payment, that’s something to be concerned about,” Dunning tells BuzzBuzzNews. “But Canadians are capable of making smart financial choices — asking themselves, how does the cost of my housing as an owner compare to that of a renter.”
While Dunning acknowledges that most would prefer to have very little debt in retirement, he believes the issue is being overstated.
“I’ll be retiring in the next few years, and I still have a mortgage,” he says. “It’s not something I’m particularly concerned about.”