Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.
If you’re a few years out from retirement and your mortgage is up for renewal, you’re in a uniquely uncomfortable spot. A higher payment is annoying when you’ve got a paycheque behind it. It’s a different problem when your income is about to drop to CPP, OAS, and whatever you’ve saved.
I talk to people in this exact situation often, and the math catches a lot of them off guard. Below, I’ll walk through how the renewal wave hits near-retirees differently, and the specific moves that keep it from pushing your retirement date back.
The two trends colliding right now
Roughly one million mortgages are up for renewal in 2026, according to the Canada Mortgage and Housing Corporation. Many were locked in during the ultra-low-rate years, so even with rates well below their 2023 and 2024 highs, plenty are staring at meaningfully higher payments.
Now layer on a second concerning trend. Statistics Canada reports the average retirement age hit a record 65.4 in 2025, and a growing share of Canadians are heading into retirement still carrying a mortgage. When those two trends collide, a renewal stops being a budget line. It can decide when you actually get to stop working.
1. Test the new payment against your retirement income, not your salary
This is the big one, and it’s where I see the most denial. A payment you can comfortably carry on a working income can become a genuine problem once that income drops to CPP, OAS, and portfolio withdrawals.
Before you sign anything, build a quick retirement budget and drop the new mortgage payment into it. If it eats an uncomfortable share of your projected retirement income, that’s your signal to act now, while you still have a paycheque and options.
For some people, the honest answer might mean having to work a couple more years. I wrote about how to make delayed retirement actually pay off in a recent CTVNews.ca column, and it’s worth a read if that’s on the table.
2. Know your guaranteed income floor first
You can’t pressure-test a payment against your retirement income if you don’t know what that income will be. And most people are guessing.
Canada Pension Plan (CPP) and Old Age Security (OAS) are your guaranteed, inflation-indexed floor, so start there. The trouble is that very few Canadians get the maximum CPP, and the gap between what people assume and what actually lands in their account can be thousands of dollars a year.
I broke down what the average Canadian really receives from CPP in 2026 in a recent Blueprint Financial video. Nail those numbers down before you decide whether this mortgage is something you can carry into retirement.
3. Extend the amortization or attack the balance
When the payment jumps, the default move is to stretch the amortization to bring it back down. Stretching a mortgage into your 70s deserves a careful analysis. Every year you extend is another year servicing debt on a fixed income.
The flip side is using a lump sum or part of a non-registered account to knock down the balance before you renew, so you’re financing less at the higher rate. If you’d rather act before your term is even up, restructuring tools like blend-and-extend exist, and I walked through those here. None of these is automatically right. The point is to choose deliberately, not just grab whatever lowers this month’s payment.
4. Run the downsizing math carefully
Downsizing sounds simple: sell the big house, buy something smaller, pocket the difference, kill the mortgage. Sometimes it works beautifully. Often it doesn’t pencil out the way people expect.
Factor in a smaller home in the same hot market, land transfer tax, realtor fees, moving costs, and maybe a condo fee you didn’t have before, and the leftover cash can be thinner than imagined. That’s partly why so many people who plan to downsize never actually pull the trigger.
I’m not against downsizing. I just want you to run real numbers on a real listing before you treat it as your renewal escape hatch.
5. Watch the tax trap if you fund the payment from registered accounts
Here’s a trap that catches careful people. To cover a higher mortgage payment in retirement, they pull extra from their Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF). That solves the cash flow, but those withdrawals are fully taxable income.
Pull too much in a year and you can bump yourself into a higher bracket or, worse, trigger the OAS clawback, quietly shrinking a benefit you were counting on.
If you’re going to carry a mortgage into retirement, co-ordinate how you fund it with your withdrawal plan. Drawing from a TFSA, which doesn’t count as taxable income, might be the smarter way to cover that payment.
Final thoughts
A renewal in your final working years isn’t just about this year’s payment. It’s a fork in the road for your whole retirement. Know your real income floor, test the payment against that floor instead of your salary, and choose your restructuring move on purpose. Do that, and a renewal that could have set your retirement back a few years becomes something you’ve planned around instead.
