Many Retirees Are Still Managing Six-Figure Mortgage Debt. Here’s Fed Data by Age Group

Daniel Liberto

Tue, September 1, 2026 at 12:35 PM GMT+3 4 min read

Even manageable housing debt can reshape how much income a retiree needs each month.
Credit: Getty Images

Key Takeaways

Housing debt can linger well into retirement, including among more than a quarter of households ages 75 to 84.
Older borrowers often still owe substantial amounts, with median balances remaining above $100,000 through age 84.
Carrying a mortgage into retirement is not necessarily a mistake, but it raises the dependable monthly income needed for fixed expenses.

Conventional wisdom suggests paying off your home mortgage before retiring is a sound strategy. But Federal Reserve data shows many Americans don't reach that goal, with substantial housing debt extending well into later life.

Mortgage Debt Becomes Less Common With Age, But Doesn't Disappear

The Federal Reserve's Survey of Consumer Finances tracks the share of households carrying mortgage or home-equity debt across age groups. The percentage generally declines as households get older, but substantial numbers carry that debt well into their later years.

The sharpest decline occurs around traditional retirement age. The share of households with housing debt falls from 47% among those ages 55 to 64 to 29% for ages 65 to 74. After that, the decline slows: More than one-quarter of households ages 75 to 84 still carry a mortgage or home-equity balance.

Even in the oldest age group analyzed, ages 85 to 94, nearly one in five households still owes money on their home.

Why This Matters

Retirement often means living on less income, with fewer opportunities to replace it and potentially higher healthcare costs. Reducing fixed expenses, including mortgage or home-equity payments, can give retirees more room in their budgets.

Older Borrowers Still Owe a Median of $110,000

The percentages above become more striking when you consider the balances. This isn't simply a matter of retirees carrying a few thousand dollars of housing debt. Median loan balances remain above $100,000 through age 84, and even among households ages 85 to 94, the median is still $80,000.

Part of this comes down to who's left in the borrower pool. Households close to paying off their mortgage or home equity loan drop out of these figures first because they have little left to pay back. What remains are borrowers who still owe substantial amounts, usually because their loan started later.

Some older borrowers may have bought a home later in life, moved, or taken on a new mortgage after divorce or remarriage. Others may have reset the clock on an existing mortgage by refinancing, or taken on new debt through a home-equity loan—perhaps even on a property that had once been paid off.

What Mortgage Debt Can Mean for Your Retirement Plan

A mortgage adds a recurring expense to a monthly budget that often becomes tighter once paychecks stop. Even a few hundred dollars less in fixed costs each month can make it easier to handle an unexpected bill or a downturn in the markets.

That doesn't mean carrying a mortgage into retirement is always a bad idea. If the interest rate is low, the payment fits comfortably within monthly income, and paying off the loan would drain savings needed for other expenses, holding onto the debt can be the more sensible choice. In fact, the money left invested may earn more than the interest saved by paying off the loan. This trade-off can be particularly compelling for borrowers who locked in a rate near 3% during 2020 and 2021.

Mortgage debt becomes more burdensome when something goes wrong. A sustained market decline, a major expense, or the death of a spouse can be harder to absorb when a household must cover a fixed housing payment. Meanwhile, a retiree with no mortgage has more flexibility to handle such a setback.

Before deciding whether to keep a mortgage or prioritize paying it off, retirees should consider how much of their monthly income the mortgage and other housing costs are eating up. They should also weigh whether paying off the loan would leave them short on savings for unexpected expenses, such as a medical bill, or force them to sell investments at an unfavorable time.

Paying off a mortgage before retiring isn't automatically the smarter move. But retirees carrying substantial debt should understand how the payment fits into their income plan and how they would cover it if their finances changed.

Read the original article on Investopedia