Most Americans become mortgage-free around the age of 62, typically aligning with retirement, according to Erate.com. While nearly two-thirds of homeowners 65 or older have paid off their homes, an increasing number are carrying mortgage debt into retirement, notes Yahoo Finance.
The average age to pay off a mortgage in the U.S. is around 62, with many becoming mortgage-free in their early 60s, coinciding with or just after typical retirement age, though figures vary by source. While some financial experts suggest paying it off by 45 for aggressive investing, data shows a significant portion of homeowners, especially older ones (60+), are mortgage-free, but increasingly, older adults (60s, 70s, 80s) carry more mortgage debt than previous generations, according to Marketplace.
The conventional wisdom is that you should pay off your mortgage before you retire. Yet many in their senior years do not, choosing instead to retire with a mortgage. Indeed, over 10 million homeowners paying off their mortgage are 65 and older, according to a study by mortgage broker LendingTree.
18% of homeowners under age 44 have paid off their mortgage (link provided)
About 35 million U.S. households owned their places outright without a monthly mortgage as of 2024, according to the Census Bureau. Some 900,000 loans were paid off in 2024, with more loans paid in full in Vermont and New Mexico than anywhere else.
It might make sense, for example, to pay off your mortgage early if you struggle with keeping money in the bank. Your home can be a forced-savings tool, and making extra payments can save you thousands of dollars in mortgage interest over time, plus you'll build equity in your home more quickly.
The average age to pay off a mortgage in the U.S. is around 62, with many becoming mortgage-free in their early 60s, coinciding with or just after typical retirement age, though figures vary by source. While some financial experts suggest paying it off by 45 for aggressive investing, data shows a significant portion of homeowners, especially older ones (60+), are mortgage-free, but increasingly, older adults (60s, 70s, 80s) carry more mortgage debt than previous generations, according to Marketplace.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.
If you haven't saved enough for retirement or put a premium on investing: If you're not maxing out contributions to your 401(k), IRA or other retirement accounts (or making larger catch-up contributions if you're eligible), it's generally advisable to do so before considering paying off your mortgage.
50-59-year-olds are the time when people tend to pay down their debt rapidly – and increase their retirement savings. 60-69-year-olds are or are close to being mortgage-free. However, it's becoming more common for retirees to carry a mortgage.
By the age of 50 it is ideal to be debt-free, and your retirement savings should be enough to give you a comfortable life. Retiring with debt can be a stressful.
As a homeowner, your equity is your biggest advantage in today's market. If you're mortgage-free (or close to it), it could give you the power to buy your next home in cash. That means you'd still have no mortgage payment in retirement, plus: Less financial stress as you age.
According to Census Bureau data, while approximately 63% of homeowners aged 65 and over have fully paid off their homes, less than 28% of working-age homeowners (under 65) have done so.
The following savings guidelines can be a starting point for evaluating your progress toward a fully funded retirement. These rules of thumb say you should have saved ... 2 to 3 times your income by age 40. 3 to 4 times your income by age 45.
Understanding Mortgage Affordability in Canada
For insured mortgages in Canada, CMHC recommends a maximum GDS ratio of 39%. For a $90,000 salary (which breaks down to $7,500 per month), this means your housing costs shouldn't exceed $2,925 per month.
Short-term savings: Renting is cheaper than buying in the short term because you don't need a big down payment or lump sum to buy a house. Moving flexibility: You have much more flexibility with changing your home and moving around. This is great for individuals not set on living in the same place for years to come.
Here are some tips to help you get approved for a mortgage: Check your credit score: A higher credit score can improve approval chances and potentially lower interest rates (aim for 620+). Assess your finances: Review your income, DTI ratio and savings to determine affordability. DTI should be 36% or lower.