Traditionally, homeowners looked forward to paying off their mortgage before retirement and living out their golden years without the heavy burden of a monthly house payment. But that scenario is becoming less common, according to a recent survey.
The survey,"Retirement and Mortgages,"by national mortgage banker American Financing, found 44 percent of Americans between the ages of 60 and 70 have a mortgage when they retire, and as many as 17 percent of those surveyed say they may never pay it off. The survey also found that 32 percent predict they will be paying their mortgage for at least eight more years.
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There were some respondents who expected to live at least some of their retirement mortgage-free. Fourteen percent of respondents said it will take three to five years, and seven percent said it will take one or two more years to pay off their mortgage. Twenty percent expected to pay off their mortgage within one year of retirement, theWashington Postreported.
These results closely mirror findings from an October 2017Fannie Maereport that showed that today’s older boomers — those born between 1946 and 1951 — demonstrate a greater likelihood of carrying mortgage debt than previous generations.
FAQs
Should you pay your mortgage off? If your bank interest rate is less than your mortgage rate, pay it off. If your bank interest rate is more than your mortgage rate, keep the mortgage for now.
What percentage of retirees have their house paid off? ›
Survey finds that 44 percent of Americans are still paying for their home when they retire.
Is it better to retire with or without a mortgage? ›
Paying off the mortgage ahead of retirement can be a real stress reducer. Your monthly expenses will be cut, leaving you less vulnerable to a sudden property tax increase, an emergency repair, or the impact of inflation.
What is the average age Americans pay off their mortgage? ›
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
Do most retirees have their mortgage paid off? ›
For many retirees, being free of mortgage payments in time for retirement is becoming a thing of the past. The oldest segment of baby boomers—individuals born between 1946 and 1951—are far less likely to have paid off their mortgage prior to retirement, according to TIAA.
Why does Dave Ramsey recommend paying off mortgage? ›
Pay Early and Often
As Ramsey pointed out, paying more than the minimum amount due each month can cut down on the total amount of interest paid. This is because more of your hard-earned money is going toward the principal balance rather than the interest. Paying early and often also can lower the overall loan term.
At what age should you no longer have a mortgage? ›
“Shark Tank” investor Kevin O'Leary has said the ideal age to be debt-free is 45, especially if you want to retire by age 60. Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued.
How many people over 70 still have a mortgage? ›
Nationally, a little more than 15 million homeowners 55 to 74 years old don't have a mortgage compared to about 17.7 million who do. For comparison, about 9.6 million homeowners 65 and up have a mortgage, while more than 16 million (16,184,634) don't.
How many people still have a mortgage at 65? ›
But that isn't practical for many Americans: Nearly 10 million homeowners aged 65 and older still have a mortgage, according to a new study from LendingTree. That translates to nearly 19% of homeowners 65-and-up across 50 metro areas who still have a mortgage, researchers say.
When retirees should not pay off their mortgages? ›
Paying off your mortgage may not be in your best interest if: You have to withdraw money from tax-advantaged retirement plans such as your 403(b), 401(k) or IRA. This withdrawal would be considered a distribution by the IRS and could push you into a higher tax bracket.
Retiring without savings requires sacrifices and strategies. Social Security may not provide enough money for most people to maintain their pre-retirement lifestyles. For some, downsizing or working part-time can provide a supplement to Social Security.
Do most people retire debt free? ›
But the scope of debt among retiree households is real and growing. The number of retired households carrying debt of some sort has approximately doubled in the last 30 years. Most of this growth has come from new mortgages. The scope of this borrowing is new, but the question is not really how many people owe.
What percentage of people never pay off their mortgage? ›
The share of US homes that are mortgage-free jumped 5 percentage points from 2012 to 2022, to a record just shy of 40%. More than half of these owners have reached retirement age. Freedom from mortgage debt gives them the option to age in place—or uproot to sunnier climes.
Can a 72 year old get a 30 year mortgage? ›
Age doesn't matter. Counterintuitive as it may sound, your loan application for a mortgage to be repaid over 30 years looks the same to lenders whether you are 90 years old or 40.
Will a bank give a 70 year old a 30 year mortgage? ›
You Can Get a 30-year Mortgage at Any Age
You could be 99 years old and get a 30-year mortgage as long as you qualify. The lender may not deny a loan because they don't think you'll live long enough to pay it off.
What percentage of retirees are debt free? ›
Average Retirement Debt: The Numbers
Three in 10 devote more than 40% of their monthly income to debt and a quarter have a mortgage with more than 20 years remaining on it. More than half say they intend to enter retirement debt free, but only one-quarter of retired Boomers actually are debt free.
What percentage of homeowners have their house paid off? ›
Almost 40% of US homeowners own their homes outright as of 2022—many of them baby boomers who refinanced when rates were low.
