How to Retire Your Mortgage Before You’re 65

A Royal Bank of Canada housing study done in the past couple of weeks has everyone all in a flurry, after that report stated that the majority of Canadians will be carrying their mortgage with them into their retirement years. But just because a study says it, does that mean that it’s so? Of course not, it’s simply a reminder of where we are, and what we need to do to get where we want to go. And in order to make sure that you’re not one of the majority taking your mortgage with you into retirement, here are a few things you can do to avoid it.
The first, and most logical thing, to do is to always pay your mortgage first, before you pay anything else. Think about it, your home is probably your biggest priority anyway, right? Without it, there wouldn’t even be a need to pay those utility bills, cable bills, and phone bills. So why then, do some people invest into their child’s RESPs, or their own RRSPs, and then find themselves getting behind on their mortgage (which won’t last too long before you lose your home anyway.) Always, always prioritize and always, always pay your mortgage first. Staying on top of payments now is the best way to make sure that you don’t have them in the future.
In addition to making sure that you’re always making your payments, also pump up those payments by a small percentage. Again, the more you pay now, the less you’ll pay later. This little nugget of advice seems to make so much common sense, but so many homeowners neglect to do it – or even take stock of what they’re paying, and how much they can afford to pay. Always compare your mortgage payment to the rate of inflation for the year, the percentage by which you get a raise, or anytime anything else in your financial life changes. While we so often look to see where we could be saving money in our budget, it’s not often when we look to see where we could spend just a little bit more. But in the case of your mortgage, it could be just the difference you need.
These are great ways to make sure your mortgage payment doesn’t come with you into your retirement years. But the best way to make sure that you don’t have too much of a mortgage when you retire is to not take on too much of one to begin with. All too often home buyers search for the biggest house or the one with the most features. Once they’re in it, they then search for ways to improve it, or are too quick to take out a second mortgage for expenses that aren’t really necessary. While your home is a great tool for borrowing and always there when you need it, make sure not to borrow too much against it – or it might still be there when you don’t.