Canada faces a troubling retirement trend: pre-retirees are taking on mortgage debt at record rates, with those aged 55 to 64 posting the fastest growth in 2025, according to fresh data from Statistics Canada.
Mortgage balances for this age group jumped approximately 6% year-over-year—a significant spike driven by a phenomenon financial experts are calling the "bank of mom and dad" effect. Older homeowners are tapping into their home equity to help younger family members navigate Canada's punishing real estate market, or using borrowed funds for investment purchases.
A Generational Shift in Retirement Finances
The numbers tell a striking story. Royal LePage data show that 29% of recently retired or near-retirement Canadians continue making mortgage payments on their primary residence—nearly double the share from just a decade ago and a dramatic leap from only 8% in 1999.
"Young people are trying to get into the housing market in Canada, which has been extremely challenging," explains Tracy Valko of Valko Financial. "We're seeing a huge uptick in mom and dad taking equity from their existing property to gift a down payment or provide financial support."
The Canada Mortgage and Housing Corporation (CMHC) 2025 Mortgage Consumer Survey reveals the scale: 41% of first-time buyers relied on gifts or inheritance to cover mortgage costs, averaging nearly $80,000. Another 20% of repeat buyers received family financial support averaging $103,382.
Debt Climbing Up the Age Ladder
"Debt isn't disappearing in Canada," Valko notes bluntly. "It's just moving up the age ladder."
With most of their wealth locked in their primary residence, many older Canadians are turning to refinancing and extended amortization periods to manage cash flow. These decisions, however, push mortgage obligations deeper into retirement years when earning capacity is declining.
Mortgage broker Lisa Tomlinson observes that lenders are increasingly offering alternative products like reverse mortgages. "Sometimes we can't amortize it to a point where they're still qualifying, and we're having to rely on different mortgage products," she explains.
Interest Rates and Rising Costs Squeeze Seniors
The pressure intensifies as higher interest rates squeeze household budgets already strained by inflation and mounting healthcare expenses. For many, the math simply doesn't work anymore.
"Unfortunately, it has caused some of them to revert to selling their properties," Tomlinson says. "Everything tends to get more expensive, to a point where it doesn't make sense for them to continue [in their home]."
Credit expert Richard Moxley acknowledges the harsh reality: "People just need to understand that things have changed, it's not the same world that they grew up in when their parents were aging, and we have new realities. Things have changed with just how expensive things are in general."
More Seniors Staying in the Workforce
Statistics Canada data reveal another adaptation to these financial pressures: 15.2% of Canadians over 65 remain in the workforce, continuing five consecutive years of increases. Canada now has 1.2 million seniors actively working—representing 5.2% of the country's total labour force.
For many, continuing to work isn't optional but necessary to manage mortgage payments, rising living costs, and healthcare needs once considered covered by retirement income.
This article is based on reporting from Canadian Mortgage Trends. Read the original story at Canadian Mortgage Trends.