Most of us were raised with the idea that being mortgage-free by retirement was the ultimate goal. And while there’s nothing wrong with financial freedom, it's worth asking: what if keeping (or even adding) a mortgage in retirement could jeopardize your financial security?

With Canadian homeowners now sitting on substantial home equity—over 25% on average, according to Mortgage Professionals Canada—your home may be one of your most powerful financial tools. Whether you’re looking to supplement your retirement income, delay downsizing, or fund in-home care, your house can be more than just where you live.

Why the “Mortgage-Free by 65” Rule May Not Always Work

Traditionally, being mortgage-free by retirement was seen as a sign of success. But in today’s market, that approach doesn’t always make the most financial sense.

Here’s why:

• Low interest rates (historically speaking): Even with recent increases, mortgage interest rates are often still lower than the average returns from a balanced investment portfolio.
  
  

• Opportunity cost: If your investments are earning 6–8% annually, it may be smarter to carry a low-interest mortgage while keeping your money working in the market.
  
  

• Liquidity: Unlike your home, investments can be accessed as needed, without selling or downsizing.
  
  

• Home appreciation outpaces borrowing costs: In many Canadian markets, homes appreciate at rates similar to or greater than mortgage, HELOC, or reverse mortgage interest rates. That means you're building long-term value even while accessing cash, and staying in your home.

3 Smart Ways to Leverage Your Home in Retirement

1. Refinance for Flexibility
   If you have strong equity, refinancing into a manageable mortgage may give you access to funds for home improvements, travel, or healthcare—without needing to tap your retirement accounts early.

2. Reverse Mortgages
   A reverse mortgage allows Canadians aged 55+ to access up to 55% of their home’s value—with no monthly payments. The loan is repaid when you sell or move, and you stay in your home the entire time. This option is ideal for fixed-income households who want to avoid selling investments or downsizing.

3. Home Equity Line of Credit (HELOC)
   A HELOC gives you a revolving credit line based on your home’s equity. It's a flexible tool for managing expenses like home care, gifts to family, or emergency costs—on your terms.

What About Long-Term Care and Aging in Place?

One of the biggest unknowns in retirement is future care needs. Wait lists for long-term care in Canada can exceed a year depending on your province. Most of us would prefer to age at home—but renovations, in-home care, and services all cost money.

Tapping into your home equity can allow you to:

• Make accessibility upgrades
  
  

• Hire home support or nursing care
  
  

• Stay close to family, neighbours, and your familiar surroundings
  
  

• Avoid being forced into a premature sale or move

The Emotional Side: It’s Okay to Shift Your Mindset

We’ve all heard the advice: "Pay off your mortgage before retirement." And for many, that feels right. But retirement today looks different. We’re living longer, markets are more complex, and options like HELOCs and reverse mortgages offer smart, flexible ways to increase financial peace of mind—without selling your home.

You worked hard for your house. Now let it work for you—on your terms.

Quick Tips for Using Your Home as a Retirement Tool

Final Thought: Plan With Professionals

Your retirement plan should reflect your life and your goals—not just outdated rules. Whether you carry a small mortgage, open a HELOC, or explore a reverse mortgage, you deserve a plan that gives you options, independence, and peace of mind.

Your home is more than where you live—it’s a part of your retirement strategy.

Let’s talk about how to make that strategy work for you.

Call us at 647 694-7033 or email [email protected] for a no-pressure consultation.

Alan Borcic is a licensed mortgage agent… serving GTA and helping renewals, refinances, and private lending

Sources:

1. Statistics Canada – Household balance sheet, national balance sheet and financial flow accounts
   https://www150.statcan.gc.ca/n1/daily-quotidien/250305/dq250305a-eng.htm
   
   

2. Government of Canada – General Information on Long-Term Care
   https://srv111.services.gc.ca/generalinfo/index
   
   

3. Statistics Canada – Average Home Equity Data (Table: 14-10-0060-01)
   https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410006001
   
   

4. RateSpy – What Will Canadians Do With All Their New Equity?
   https://www.ratespy.com/what-will-canadians-do-with-all-their-new-equity-072219109#:~:text=Using%20Mortgage%20Professionals%20Canada%20data,now%20have%20over%2025%25%20equity.
   
   

5. WOWA – Canada Housing Market Report
   https://wowa.ca/reports/canada-housing-market
   
   

6. Fisher Investments – Definitive Guide to Retirement Income
   https://www.fisherinvestments.com/en-ca/campaigns/definitive-guide-to-retirement-income/1m
   
   

Morningstar Canada – How to Use Your Home as a Retirement Asset in Canada
https://www.morningstar.ca/ca/news/248172/how-to-use-your-home-as-a-retirement-asset-in-canada.aspx