How to Retire Without a Mortgage

More Americans are now retiring with a mortgage on their home. A study by Harvard University’s Joint Center for Housing Studies concluded that 46% of homeowners between the ages of 65 and 79 are still making mortgage payments.1 In contrast, three decades ago, only 24% of this subset of Americans hadn’t yet paid off their home.

Retiring without a mortgage can provide more financial security (and less stress!) for retirees—and for many Americans, it’s a goal worth realizing. Here are four tips to help you retire without a mortgage.

1. Make extra principal payments

Finding ways to kick in extra money toward your mortgage payment every month—or periodically whenever you can, if your mortgage agreement allows—will likely make a considerable difference in how much interest you ultimately pay your financial institution before owning your home outright.

Here’s an example: Taking out a $500,000 mortgage with a 5% interest rate over 30 years pencils out to monthly payments of roughly $2,700. This would lead the borrower to ultimately pay $466,000 in interest over 30 years. If the mortgage holder paid an extra $275 a month toward the principal, that would save approximately $100,000 in interest, and the loan would be paid off roughly five years sooner.

2. Pay bi-weekly

Making bi-weekly instead of monthly payments can reduce the term of a 30-year mortgage to about 25 years. With bi-weekly payments, you make half the monthly mortgage payment every two weeks. That works out to 26 payments in a year, which equals the amount of 13 monthly payments rather than 12. This extra payment each year makes a notable difference over time.

3. Take advantage when interest rates are lower

You can reduce your monthly payment if you refinance when market interest rates are lower, and there is equity in your home. What you want to be careful about, however, is extending the period of the mortgage. To eliminate your mortgage early when refinancing, consider selecting a shorter loan period. Let’s say you have 20 years left on a 30-year mortgage. You’ll ultimately save yourself money if you capture a lower interest rate and select a 15-year mortgage instead. Be sure to consider the total expenses (lender fees, closing costs, etc.) when exploring refinancing and amortization options.

4. Downsize your home

Some people who are anticipating retirement decide that they don’t really need all the extra room in their homes—and potentially the extra expenses that may come with it—after their children have left the nest. Moving to a smaller home could mean that you can pay for the new place in cash. No more mortgage and less house upkeep.

Even those who successfully pay off their mortgage before retiring face regular home expenses that do not go away (property taxes, utilities, ongoing maintenance, etc.). It’s important for current and future homeowners to know all the potential costs of owning a home—before and after the mortgage is paid off. Also, check with the financial institution where you hold your mortgage because each mortgage may be subject to different terms and offer different repayment options.




This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, tax, insurance, or investment advice.  This does not constitute an offer to provide any services, nor a solicitation to purchase securities. The contents are not intended to be advice tailored to any particular person or situation. We believe the information provided is accurate and reliable, but do not warrant it as to completeness or accuracy.  This information may include opinions or forecasts, including investment strategies and economic and market conditions; however, there is no guarantee that such opinions or forecasts will prove to be correct, and they also may change without notice.  We encourage you to speak with a qualified professional regarding your scenario and the then-current applicable laws and rules.

Advisory services are offered through Corient Private Wealth LLC and its affiliates, each being a registered investment adviser (“RIA”) regulated by the U.S. Securities and Exchange Commission (“SEC”).  The advisory services are only offered in jurisdictions where the RIA is appropriately registered.  The use of the term “registered” does not imply any particular level of skill or training and does not imply any approval by the SEC. For a complete discussion of the scope of advisory services offered, fees, and other disclosures, please review the RIA’s Disclosure Brochure (Form ADV Part 2A) and Form CRS, available upon request from the RIA and online at We also encourage you to review the RIA’s Privacy Policy and Code of Ethics, which are available upon request.

Our clients must, in writing, advise us of personal, financial, or investment objective changes and any restrictions desired on our services so that we may re-evaluate any previous recommendations and adjust our advisory services as needed. For current clients, please advise us immediately if you are not receiving monthly account statements from your custodian. We encourage you to compare your custodial statements to any information we provide to you.