At what age do most people finish paying their mortgage?

Asked by: Ms. Ciara Corkery  |  Last update: March 24, 2024
Score: 4.3/5 (60 votes)

Sure, there's something to be said for being completely debt-free by age 45, but do remember that mortgage debt is considered a healthy type to have. And many homeowners continue to make mortgage payments well into their 50s and 60s. Some people even have a mortgage during retirement.

At what age does the average person pay off their mortgage?

Mortgage-Paying Habits of Average Americans

For example, according to the Census Bureau, fewer than 28% homeowners below retirement age have paid off their homes completely, as opposed to almost 63% of those 65 or older.

At what age should I finish paying my mortgage?

There's no need to pay off your mortgage by a certain age, although one common rule of thumb says you should pay off your mortgage before you retire. The idea is that getting rid of one of your biggest monthly expenses means you need less income to cover your living expenses.

What percentage of people pay off their mortgage?

Almost 40% of US homeowners own their homes outright as of 2022—many of them baby boomers who refinanced when rates were low.

Do most people retire with a mortgage?

A higher percentage of homeowners are retiring with a mortgage than was the case 30 years ago. A recent Harvard University study found that 46% of homeowners between ages 65 and 79 carried a mortgage in 2016, almost twice as many as the 24% of homeowners in this age group who carried a mortgage in 1990.

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24 related questions found

What 3 things should be paid off before retirement?

Other types of debt—personal loans, credit cards, and auto loans, for example—tend to have higher interest rates and lack any potential tax benefits. These kinds of debt should "retire" before you do, because they can eat into your savings and reduce your standard of living.

Can I retire with 500k and no mortgage?

If you retire with $500k in assets, the 4% rule says that you should be able to withdraw $20,000 per year for a 30-year (or longer) retirement.

How many Americans live mortgage-free?

Nearly 40% of U.S. homeowners were living mortgage-free in 2022, according to a Bloomberg analysis of Census Bureau data. Many of them were baby boomers who refinanced when rates were low.

How much do most people owe on their mortgage?

The average mortgage debt balance per household was $241,815 as of Q2 2023, a 4 percent increase from 2022. The average mortgage balance exceeds $1 million in 26 U.S. cities, including 18 cities in California.

How many Americans own their home free and clear?

Similarly, states along the Pacific Coast—where home values skyrocketed during the pandemic—have some of the lowest rates of free-and-clear homeownership among the working-age population. California (22.7%), Washington (22.8%), and Oregon (22.9%) sit at 45th, 44th, and 43rd out of all 50 states, respectively.

How many people retire with a mortgage?

Survey finds that 44 percent of Americans are still paying for their home when they retire. Some retirees living on a fixed income still face a monthly payment on their homes.

Is being debt-free the new rich?

Myth 1: Being debt-free means being rich.

A common misconception is equating a lack of debt with wealth. Having debt simply means that you owe money to creditors. Being debt-free often indicates sound financial management, not necessarily an overflowing bank account.

What is the average mortgage debt in America?

Key average mortgage debt insights

The average mortgage debt balance per household was $241,815 as of Q2 2023, a 4 percent increase from 2022. The average mortgage balance exceeds $1 million in 26 U.S. cities, including 18 cities in California.

Do most retirees have no mortgage?

For many retirees, being free of mortgage payments in time for retirement is becoming a thing of the past. The oldest segment of baby boomers—individuals born between 1946 and 1951—are far less likely to have paid off their mortgage prior to retirement, according to TIAA.

Do most retirees own their home?

A financial advisor can help you make critical decisions in retirement, like where to live and how much to spend on housing. Over 79% of Americans ages 65 or older own their home, according to Statista, meaning approximately 21% are renters. Ownership can helps you build equity and wealth.

Do most millionaires pay off their mortgage?

Most have paid off their mortgages. In 2020, 58% of the state's equity millionaires owned their homes free and clear. Statewide, there has been a dramatic rise in the number of Californians who have paid off their mortgages, from 1.6 million households in 2000 to 2.4 million in 2020.

How many people retire mortgage free?

The housing market is historically unaffordable - but a record number of Americans now own their home without a mortgage. The share of US homes without a mortgage jumped five percentage points from 2012 to 2022 to a record near 40%, Bloomberg reported. More than half of those homeowners are at retirement age.

How many households are debt free?

Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.

Is it good to live mortgage free?

Key Takeaways. Paying off your mortgage early could free up your cash for travel, retirement, or other long-term plans. Being mortgage-free may insulate you from losing your home if you run into financial difficulties.

What is a good monthly retirement income?

Based on the 80% principle, you can expect to need about $96,000 in annual income after you retire, which is $8,000 per month.

Can I retire on $4,000 a month?

This brings us to the question -- can a retired person live on $4,000 a month? The answer is yes, almost 1 in 3 retirees today are spending between $2,000 and $3,999 per month, implying that $4,000 is a good monthly income for a retiree.