Where Seniors Are Most Likely Still Paying Their Mortgage (2024)

FAQs

Where Seniors Are Most Likely Still Paying Their Mortgage? ›

The largest shares of homeowners 65 and older still with a mortgage are in Miami, Los Angeles, and Sacramento, Calif., according to the analysis. On the other hand, three Texas metro areas—Houston, Austin, and Dallas—have the smallest share of homeowners 65-plus with a mortgage.

In 2022, researchers found that just over 40 percent of homeowners older than 64 had a mortgage, a jump from roughly 25 percent a generation ago.

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.

According to the latest SCF, 30.1 percent had mortgages in 2022. The share of homeowners ages 65 to 74 with mortgages has similarly trended upward, increasing from 29 percent in 1998 to 38 percent in 2022.

Paying off your mortgage may make sense if: You have substantial retirement savings, especially if the funds you'd be withdrawing are in a taxable account and are not earning much interest. You're downsizing.

How much does the average 70-year-old have in savings? We were curious, too, so we asked. Our 2023 Planning & Progress study found that the average amount of retirement savings for 70-year-olds in the U.S. is $113,900.

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.

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.

The first exception allows lenders to account for age as long as they do so in favor of applicants age 62 or older. This is a relatively common practice in discrimination laws, which typically allow direct consideration of age so long as it benefits older individuals.

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%.

How far will $500,000 go in retirement? ›

If you have $500,000 in savings, then according to the 4% rule, you will have access to roughly $20,000 per year for 30 years. Retiring early will affect the amount of your Social Security benefit.

You might want to pay off your mortgage early if …

You want to save on interest payments: Depending on a home loan's size, interest rate, and term, the interest can cost hundreds of thousands of dollars over the long haul. Paying off your mortgage early frees up that future money for other uses.

Summary: maximum age limits for mortgages

Many lenders impose an age cap at 65 - 70, but will allow the mortgage to continue into retirement if affordability is sufficient. Lender choices become more limited, but some will cap at age 75 and a handful up to 80 if eligibility criteria are met.

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%.

Retirement doesn't have to stop you from buying a new home. In fact, many standard loan programs allow seniors receiving Social Security and retirement income to qualify for a mortgage without proof of employment.

Average Retirement Debt: The Numbers

More than half say they intend to enter retirement debt free, but only one-quarter of retired Boomers actually are debt free.

It's possible to get a mortgage after you retire. A lot of the qualifications will be the same, including good credit, a steady income and a low debt-to-income ratio. Some qualification processes will look different, though. The biggest difference will be how you prove your income.