Reverse Mortgage Debt Rising Fastest Among Canadians Nearing Retirement
Reverse mortgage options are becoming more important as older Canadians nearing retirement increasingly leverage home equity to help younger buyers, raising long-term financial risks as retirement approaches.
Canadians nearing retirement are taking on more mortgage debt, with those aged 55 to 64 posting some of the fastest growth in 2025.
Statistics Canada data show that mortgage balances for this group rose year over year, as many tap into home equity to fund investment purchases or help younger family members enter the housing market.
Royal LePage data show that 29% of Canadians who are recently retired or nearing retirement will continue to make mortgage payments on their primary residence, nearly double the share from a decade ago and up from just 8% in 1999.
Mortgage brokers are increasingly seeing pre-retirees become the “Bank of Mom and Dad,” helping their children enter an expensive real estate market that has been very challenging for most first-time buyers. Parents have been taking equity out of their property to gift a down payment or provide financial support.
According to the Canada Mortgage and Housing Corporation’s 2025 Mortgage Consumer Survey, 41% of first-time buyers relied on a gift or inheritance to cover mortgage costs, with gifts averaging nearly $80,000. A further 20% of repeat buyers also received financial support from family, with contributions averaging more than $100,000.
Such gifts have become increasingly common among first-time buyers, particularly in higher-priced markets. For families helping a buyer enter the market, it is important to understand how lenders review gifted down payments and how the buyer’s mortgage application is structured. Sunlite Mortgage helps first-time homebuyers through the mortgage process and can help families understand how parental support may affect qualification.
Financial Pressures Rising for Older Canadians
With much of their wealth tied up in their primary residence, many older Canadians have taken steps such as refinancing or extending amortization periods to manage cash flow. Those decisions, however, are also pushing mortgage debt further into retirement.
For some clients, we are extending amortization to increase their cash flow and minimize their monthly mortgage payment. Sometimes we cannot amortize the mortgage to a point where they are still qualifying, and we have to rely on other mortgage products, such as a reverse mortgage.
Making matters more challenging are higher interest rates, which have added financial pressure on older Canadians. At the same time, many are facing rising living costs due to inflation and increasing healthcare needs, just as incomes are declining in retirement.
Unfortunately, this has led some retirees to consider selling their properties, as everything tends to get more expensive to the point where it no longer makes sense for them to continue carrying the same debt structure.
For many homeowners, however, selling is not the goal. They want to stay in their home, manage cash flow, and use their equity strategically. In these cases, reviewing options such as a reverse mortgage for Canadians 55+, a refinance, or another home equity solution can help determine what makes the most sense.
Retirement Patterns Are Changing
As carrying mortgage debt into retirement becomes more common, Canadians are entering their later years with different financial constraints than in the past.
Statistics Canada data also show that 15.2% of Canadians aged 65 and over remain in the workforce, following five consecutive years of increases. There are now 1.2 million seniors working in Canada, representing 5.2% of the country’s total labour force.
While many Canadians are choosing to remain on the job to help make ends meet, it is not always a choice retirees get to make for themselves, and as retirees age, physically and mentally, working becomes more of a challenge.
This is why mortgage planning before retirement is important. A homeowner may be able to carry mortgage debt while still working, but the same payment may become difficult once employment income stops or retirement income becomes fixed.
Reverse Mortgage Options Available for Older Borrowers
Canadians are facing greater financial challenges in their later years, but they also have more options than previous generations, particularly when it comes to mortgage products.
A popular option in Canada is a reverse mortgage, which can provide cash flow while helping homeowners remain in their property over the long term.
A reverse mortgage is not appropriate for every Canadian facing higher debt loads in retirement. That is why, at Sunlite Mortgage, we work with clients to assess the situation, explain the different options, make a recommendation, and ensure they understand it.
Demand for reverse mortgages continues to rise, driven by the country’s demographics and by elevated borrowing costs and living expenses.
For homeowners who are unsure whether this option is suitable, a Sunlite Mortgage agent will help you to decide which reverse mortgage is right for you and how reverse mortgage products compare across lenders, including CHIP, Equitable Bank, and Bloom Financial.
For homeowners who are approaching retirement, carrying mortgage debt, helping children with a down payment, or looking for ways to improve cash flow, speaking with a mortgage broker can help clarify the best path forward.
Sunlite Mortgage helps clients compare reverse mortgages with other available options so they can make an informed decision based on their income, equity, family goals, and long-term retirement plans.
