Most Homeowners Over 65 Have Paid Off Their Mortgage. What Should They Do With That Equity?
For millions of older Americans, the largest asset they own is not sitting in a retirement account. It is the house they are living in.
Depending on the data source and how mortgage debt is measured, roughly 65% to 73% of homeowners between the ages of 65 and 74 own their homes free and clear. That means approximately 27% to 35% still have a mortgage.
By age 75 and older, the percentage of homeowners who have completely paid off their homes rises substantially, with estimates ranging from roughly 77% to as high as 90%.
That represents an enormous amount of accumulated home equity.
And it raises an important question: What should you actually do with it?
A Paid-Off House Is Still Costing You Money
Eliminating a mortgage can dramatically reduce monthly expenses, especially during retirement. Yet "mortgage-free" does not mean "housing-cost-free."
Property taxes continue. Homeowners insurance continues. Repairs, maintenance, utilities, association fees and unexpected expenses continue.
A larger home that made perfect sense at 45 may become considerably more expensive and demanding at 70.
That is why reaching retirement with a paid-off home should not automatically mean staying there forever.
The better question is whether the home still fits the life you want now.
Your Equity Is Part of Your Retirement Wealth
A homeowner who purchased a property decades ago may be sitting on hundreds of thousands of dollars in equity without thinking of it as an investment.
It is.
Home equity can potentially provide financial flexibility later in life. Selling a larger property and purchasing a smaller home may free up capital for retirement expenses, travel, healthcare, helping family members or simply creating a larger financial cushion.
For someone living on a fixed income, turning part of that equity into accessible assets can materially change retirement.
The decision does not have to be purely financial either.
A smaller property may mean less maintenance. A condominium may offer fewer exterior responsibilities. Moving closer to family, healthcare, shopping or friends may improve everyday life far more than remaining in a house simply because it has been home for decades.
Having a Mortgage After 65 Is Not Automatically a Problem
The other side of these statistics matters too.
Millions of homeowners over 65 still carry mortgages.
That alone says very little about their financial condition.
Some homeowners refinanced when rates were exceptionally low. Others purchased later in life, moved to a different market, borrowed against their property or deliberately chose not to use investment assets to eliminate inexpensive mortgage debt.
The important issue is not simply whether a mortgage exists.
It is whether the payment comfortably fits the homeowner's income, assets and long-term plans.
Mortgage debt that was manageable while working can feel very different once retirement income becomes the primary source of cash flow.
The House Should Serve the Next Chapter of Your Life
For generations, paying off the family home represented one of the great financial milestones of American life.
It still does.
Yet owning a home free and clear is not necessarily the finish line. It gives homeowners something even more valuable: options.
Stay and enjoy the security of a mortgage-free home. Downsize and reduce expenses. Relocate closer to family. Sell and unlock equity. Purchase another property that better fits your lifestyle.
There is no universal answer.
The mistake is assuming that because the mortgage is gone, there is no longer a housing decision to make.
For homeowners entering their late 60s, 70s and beyond, the house may be one of the most important financial assets they own.
The real question is whether that asset is still working for the life they want to live.
Request an appointment to discuss your personal situation by clicking here. Together we will evaluate your personal financial goals.
Warm regards,
Sharon Ben-David
Your Safe Money Lady™
Licensed Mortgage Broker | Certified Professional Retirement Planning Adviser
NMLS #2308601
Protecting Your Nest Egg, Inc.
📞 (954) 261-5200
Because your home is more than a mortgage — it’s your peace of mind.
