Canadian real estate has shifted dramatically in the 2020s, favoring seniors over young adults. Historically, homeownership was a milestone often achieved by younger generations in their early working years. However, Bank of Canada (BoC) mortgage data from 2024 indicates that seniors are now more likely to carry mortgage debt than individuals younger than 35 years old. A comparison of borrower age at mortgage origination reveals that younger adults today are less than half as likely as previous generations to own a home. This shift raises concerns about affordability, accessibility, and the long-term implications for homeownership trends in Canada. It also highlights broader economic factors, such as rising home prices, stagnant wages, and financial barriers preventing younger generations from entering the housing market at the same pace as their predecessors.
A surprising trend has emerged in Canadian real estate: more seniors hold mortgages than young adults. The Bank of Canada’s 2024 data reveals that nearly half (49%) of mortgage debt belongs to individuals aged 45 to 64, a period often regarded as prime earning years. Middle-aged households, particularly those between 35 and 44 years old, account for 26% of mortgage holders. When combined, these two groups hold three-quarters of all outstanding mortgage debt in Canada. The remaining mortgage debt is split between younger adults and seniors, with an unexpected outcome: seniors are outpacing young borrowers. Those under 35 years old represent just 12% of Canada’s mortgage holders, while seniors aged 65 and older hold 14% of mortgages. This is an unusual distribution, especially given that the 20-34 age group is slightly larger in population than the 65+ demographic. Additionally, this trend indicates that more Canadians are carrying mortgage debt into their retirement years, a shift from previous generations who typically aimed to pay off their homes before retirement. The financial burden on seniors with mortgages could have far-reaching implications, particularly concerning retirement security and overall financial stability. With fixed incomes and rising costs of living, carrying mortgage debt later in life could put significant strain on household budgets. Analyzing mortgage originations provides a clearer picture of how homeownership patterns have changed over time. While nearly half of all outstanding mortgages belong to individuals aged 45 and older, a significant portion of these mortgages originated when borrowers were under 45. Specifically, 52% of current mortgage holders took out their loans before reaching 45 years of age.
However, when looking specifically at those who originated their mortgages before turning 35, the numbers tell a striking story. Borrowers under 35 account for just 23% of mortgage originations. This means that young adults today are less than half as likely to own a home compared to previous generations, who were significantly more active in homeownership during their early working years. Several factors contribute to this decline in homeownership among younger Canadians. Rapidly increasing home prices, stricter mortgage regulations, higher interest rates, and stagnant wage growth have created significant financial barriers. Additionally, the rising cost of living, including increased rent and student debt, has made it more difficult for younger individuals to save for a down payment. The generational divide in homeownership highlights how economic conditions have shifted over time. Previous generations benefited from more affordable housing, relatively lower debt levels, and stronger purchasing power compared to young adults today. The increasing difficulty for young Canadians to enter the housing market suggests long-term consequences for wealth accumulation and financial security in the future.
A common assumption is that seniors who hold mortgages are primarily downsizing or moving into retirement-friendly housing. However, the data suggests otherwise. While seniors make up 14% of current mortgage borrowers, only 7% of them originated their loans at age 65 or older. This indicates that most seniors with mortgages are not taking on new debt in retirement; instead, they are carrying existing mortgage obligations into their later years. The trend of carrying mortgage debt into retirement is closely linked to the rise of reverse mortgage debt, one of the fastest-growing segments of lending in Canada. Reverse mortgages allow seniors to tap into their home equity while continuing to live in their homes, but they also increase overall debt obligations. The growing reliance on reverse mortgages suggests that many seniors are facing financial challenges that prevent them from fully paying off their homes before retirement.
The increasing mortgage burden on seniors and the declining rate of homeownership among young adults indicate broader economic and social challenges. If fewer young people are able to buy homes, it could have long-term consequences for housing market stability, wealth distribution, and retirement planning. The reliance on mortgage debt in retirement also raises concerns about financial security for aging Canadians, particularly as healthcare and living expenses continue to rise.
For policymakers and financial institutions, addressing housing affordability for younger generations is a pressing concern. Initiatives such as first-time homebuyer incentives, adjustments to mortgage lending rules, and affordable housing programs could help bridge the gap and make homeownership more attainable. Meanwhile, financial planning and retirement strategies must evolve to ensure that seniors carrying mortgage debt are not left in precarious financial situations.
