If you speak to any financial planners or so-called experts on the matter, they’ll probably say, “Yes, pay off your mortgage before you retire.”

But is it fair to make the same conclusion for all individuals? Probably not. And times are changing…

Most experts will tell you to extinguish the mortgage before you retire from your job because you’ll be on a fixed income with reduced cash flow.

The logic to burning the mortgage before you retire is that you’ll be on a fixed income and you’ll need to stick to a strict budget to ensure you have cash on hand for all your living expenses. And potentially even more to pay for medical care as you get really old.

There’s also the fear of losing your home because you can’t keep up with mortgage payments, the last thing any older retired individual would want to deal with.

Others may go even go a step further in saying that paying off a mortgage can lead to retirement, or help you retire faster and at a younger age.

While that might all be true, it’s certainly not an open and shut case as everyone’s situation is different.

The answer to the question really goes back to whether you think carrying mortgage debt is a good deal or not, relative to other options.

And if you’re the rational type who runs the numbers, or the emotional type who can’t handle any sort of debt overhang, whether it’s actually hurting you financially or not.

• The Trend Is Changing
• It used to be a standard rule to pay off the mortgage before retirement
• That pretty much wasn’t even questioned
• But times have changed as have down payments

And many homeowners are carrying mortgage debt into their 70s and beyond

Back in the day, it was common to pay off the mortgage in full before retirement. Of course, at that time mortgage interest rates may have been in the double-digits, making them quite a burden.

This left homeowners with few winning investment alternatives able to beat that rate of return. By that, I mean if your mortgage rate was set at 14%, you’d have to find an investment that yielded more than 14% to not allocate extra dollars to your home loan balance.

Today, mortgage rates are near their all-time lows, with many existing homeowners now holding onto rates in the 2-3% range.

For these homeowners, it’s actually very easy to beat that rate of return, even if the stock market doesn’t yield stellar returns year after year. And even if we experience another recession and see the price of equities and other investments fall.

This might explain why fewer and fewer retirees and near-retirees are making it to the finish line with a free and clear mortgage.

• While it used to be the norm
• The numbers seem to be dropping
• With fewer than half of Baby Boomers
• Mortgage-free in retirement
   

  There are countless surveys and studies that reveal this, including one from mortgage financier Fannie Mae that revealed fewer than half of Baby Boomer owner-occupants aged 65 to 69 in 2015 were mortgage-free.And while some younger homeowners are actually experiencing higher levels of free and clear homeownership, their future projections are also negative.

  They anticipate that 51.8% of Boomer homeowners born between 1951 and 1955 will be mortgage-free when they reach 65-69 years of age in 2020.

  This compares to a 59.8% rate for those born between 1931 and 1935 who were aged 65 to 69 in the year 2000.

  Another recent survey from mortgage banker American Financing found that 44% of 60- to 70-year-old homeowners will retire while still holding a mortgage.

  Additionally, 32% of respondents expect it to take another eight years to pay the darn thing off. What’s worse, some 17% of respondents said they may never pay it off in full. See top image above for more on that.

  So it’s clear that the trend of paying off all your debt before retirement is weakening, perhaps due to increased household debt, overspending, the prevalence of low-down payment mortgages (who still puts 20% down on a home purchase?), poor planning, and so on.

  Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net