Retirement is often seen as a time to unwind — travelling more, spending time with family, or simply enjoying a slower pace of life. However, for many Canadians, this stage comes with financial stress instead of freedom.
A recent survey from Royal LePage found that nearly 30% of Canadians who plan to retire within the next year expect to carry mortgage payments into retirement. And that’s just part of the story — credit card debt among Canadians also rose by 9% year-over-year by the end of 2024.
As more people buy homes later in life, it’s becoming increasingly common to head into retirement with outstanding balances. But that doesn’t mean you’re stuck. There are practical, effective ways to take control of your finances and move toward a more secure, debt-free retirement.
Here are three smart strategies to help you manage — and reduce — mortgage and other types of debt in your golden years.
- Start with a Realistic Budget
Debt is often the result of spending beyond your means. If your income won’t increase, the key is cutting down on non-essential spending.
A budget doesn’t need to be complicated. Simply list your fixed income sources (like pensions or savings), monthly obligations (like mortgage payments, utilities, groceries), and variable expenses. Once you see what’s coming in and going out, you’ll be able to make informed decisions — whether that’s trimming unnecessary costs or allocating more toward debt repayment.
Digital tools like You Need a Budget (YNAB) or Mint can help streamline the process. These apps sync with your bank accounts and credit cards, giving you a full picture of your cash flow and even helping you track how fast you’re reducing your debts.
- Consolidate Your Debt
If you’re juggling multiple debts — like a mortgage, a line of credit, or several credit cards — debt consolidation might make things easier.
By rolling multiple debts into a single personal loan, often with a lower interest rate, you can simplify your payments. Instead of tracking various due dates and interest rates, you’ll have just one consistent monthly payment. This can also help reduce your overall interest burden, saving you money in the long run.
Mortgage refinancing is another option if you have enough equity in your home. It allows you to replace your current mortgage with a new one at better terms, possibly combining other high-interest debts into the mix.
- Leverage Balance Transfer Offers (With Caution)
For those carrying high-interest credit card debt, a balance transfer card could be a short-term solution. These cards offer a low or 0% promotional interest rate for a limited time — often up to 12 months.
During this interest-free window, you can aggressively pay down the principal without it growing from added interest. But be cautious: once the promotional period ends, the interest rate usually jumps significantly. Make sure you have a repayment plan in place before using this option.
Final Thoughts
Carrying mortgage debt into retirement isn’t ideal — but it’s also not a dead end. With some planning and the right tools, you can take back control of your finances. Whether it’s budgeting more effectively, consolidating debt, or using strategic repayment methods, there are ways to reduce the load and enjoy retirement the way it’s meant to be — peacefully and debt-free.
If you’re unsure where to start, reach out to a trusted mortgage professional. At Pankaj Aggarwal Mortgage, we’ve helped thousands of Canadians find tailored mortgage solutions — from refinancing to debt consolidation — built around their goals and lifestyle.
