The average Canadian homeowner expects to pay off their mortgage at approximately age 57, although this can extend to age 59 in provinces with higher housing costs, such as British Columbia. While many aim to be mortgage-free by retirement, rising non-mortgage debt and higher interest rates have delayed this goal for many Canadians.
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 standard amortization period in Canada is typically 25 years. Increasing your payment frequency or adding lump-sum prepayments can significantly reduce your amortization. Reducing your amortization can lower the total interest paid over the life of the loan.
The share of non-owners who say they'll never buy a home has returned to 2022 levels. Sources: Bond Brand Loyalty/Mortgage Professionals Canada. Nearly 70% of Canadians own their home—25% own it outright, while 43% are still paying off a 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.
39% of Canadians aged 55-64 have less than $5,000 in savings (-5 pts); 73% have $100,000 or less in savings. More than one in three (36%) women aged 55-64 have no savings at all, compared to one in five (22%) men.
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.
18% of homeowners under age 44 have paid off their mortgage (link provided)
Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued. It helps you free yourself from financial obligations at a time when your income is presumably stable and potentially even growing.
Most financial institutions in Canada will not lend you money if you are already using 40% or more of your monthly income to pay for your current debt. This is called your total debt service ratio (TDSR). However, how much debt is too much really depends on the individual.
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.
“Paying off your mortgage early seems impossible but it is completely doable and people do it all the time, but how can you do it and why would you want to put in the extra effort? Paying off your mortgage early will rev up your wealth building.”
The main cons of paying off a mortgage early include losing the mortgage interest tax deduction, facing opportunity costs (missing higher investment returns), and reducing your financial liquidity (tying up cash in your home instead of having it accessible). You might also incur prepayment penalties (though rare on conventional loans), and it can slightly lower your credit score by removing a large, established debt, according to U.S. Bank.
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.