Older homeowners aged 60-plus years like their homes, many view the equity in those homes as a financial reserve, and a significant share are confident of their overall retirement financial plan and expect to age in place. Importantly, the homeownership rate among this age group is nearly 80%.
Meanwhile in 2022, the homeownership rate among households ages 65 and over was 79.1%, slightly lower from 79.5% in 2021, the Joint Center for Housing Studies found. The record high was 81.1% in both 2004 and 2012.
Mortgage debt remains uncommon among homeowners age 65-plus relative to their younger counterparts; in fact, the fraction of homeowners age 65-plus who had a mortgage in 2022 (34 percent) was less than half that of homeowners under age 65 (70 percent) 3.
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.
There is no specific age to pay off your mortgage, but a common rule of thumb is to be debt-free by your early to mid-60s.
An unmortgaged home was once a retirement perk
Mark Iwry, nonresident senior fellow at the Brookings Institution. But that pattern is changing. In the Michigan study, researchers found that the share of retirement-age homeowners with mortgages rose from 38% to 51% in a generational span of about 25 years.
Can a 70-year-old choose between a 15- and a 30-year mortgage? Absolutely. The Equal Credit Opportunity Act's protections extend to your mortgage term. Mortgage lenders can't deny you a specific loan term on the basis of age.
Nearly 40% of retirees, for instance, have a mortgage. And the average mortgage balance is over $100,000, which translates to average annual mortgage payments of $10,000 that will last at least 12 years or more.
Determine your maximum monthly mortgage for a $70,000 salary
To calculate your maximum monthly mortgage payment, multiply your gross monthly income by 0.28. On a $70,000 income, your monthly mortgage payment should be no more than $1,633.
Nearly half — 45% — of all Americans who retire at age 65 are likely to run out of money before they die, according to the Morningstar Center for Retirement & Policy Studies.
The table below shows the percentage of homes without a mortgage compared to the total number of available homes on record from 2010 to 2022. 2 These figures show that the percentage of mortgage-free homes has increased steadily, from 32.78% in 2010 to 39.28% in 2022.
You can retire comfortably as a renter, though it may take some extra planning, Zigmont said. “You need to plan on rental increases and the monthly expense,” he said. “Rather than investing in owning a home, the money you would have spent could be invested in the stock market or REITs if you want real estate exposure.”
The most reliable, up-to-date data about older adults who live alone comes from the U.S. Census Bureau. According to its 2023 Current Population Survey, about 28 percent of people 65 and older live by themselves, including slightly fewer than 6 million men and slightly more than 10 million women.
In general, homeowners in California tend to stay in their homes longer than the national average. Tax laws in California incentive homeowners to stay in their homes rather than moving frequently. The following metro areas had a median homeownership duration of 16 years or longer: Los Angeles: 18 years.
The U.S. homeownership rate for householders over 65 years of age fluctuated between 78.8 percent and 80.9 percent since 2011. In the third quarter of 2024, approximately 79 percent of people over 65 years of age inhabited an owner-occupied home.
It's certainly possible to retire early on $400,000, but it won't be easy. If you have the option of working and saving for a few more years, it will likely give you a significantly more comfortable retirement.
With an average mortgage term of 30 years, this means that the average first-time buyer won't pay off their mortgages until they're 63 years and 8 months old. However, the age can differ depending on the region that the first-time buyer resides in.
Yes, retiring comfortably with $500,000 is feasible. This sum allows for an annual withdrawal of $30,000 or less, from the age of 60 to 85, spanning 25 years. If your lifestyle needs are met with $20,000 a year, or approximately $1,667 a month, then $500,000 should suffice for your retirement.
Borrowers receiving Social Security benefits can use that income to qualify for a mortgage, including Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). Lenders will evaluate your gross Social Security benefit because they use your gross income to qualify you for a loan.
Age isn't a limiting factor, but your income and mobility may be. If you've built up your savings over the years, you may not want a mortgage, preferring to buy a house outright. How Much Is My House Worth? See your free home value estimate in less than two minutes.
Generally, a creditor such as a lender cannot use your age to make credit decisions. However, there are exceptions to this rule. For example, age can be considered in a valid credit scoring system but it can't disfavor applicants 62 years old or older.
A relatively small 23% of retirees say their only major income source in retirement is Social Security. Sixty percent of this group say they have enough money to be comfortable, leaving about four in 10 retirees relying only on Social Security who are not financially comfortable.
Thus, it's not uncommon for Americans to want to pay that debt down as fast as possible. In fact, according to Census Bureau data, nearly 40% of Americans already have. But are you really better off paying off your home mortgage, or are there strategies you can employ to put yourself ahead even more?
The Average American of Retirement Age Has $70,000 in Debt, Data Shows. Here's How to Whittle Yours Down Later in Life. U.S. consumers routinely take on debt, whether in the form of a mortgage, auto loan, or credit card bill.