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Many Canadians are looking at holding mortgages well into retirement and are concerned that once Canada Pension and Old Age Security become the primary source of income, they may no longer qualify for a mortgage. For those of you in that position, I have some good news and some bad news.

Good news

First the good news. As long as you have been making your payments on time, when your mortgage is up for renewal, lenders will simply allow you to continue to renew for a new term. You must renew at your current balance and amortization, and you can simply select one of the renewal options provided for you, without a requalification process.

Bad news

Now the bad news. In this scenario you need to continue with your current lender so you are at their mercy in terms of the rate they plan to charge you. You have no leverage in negotiations if you have no alternatives. If you need to change lenders a requalification process is required.

Renew before retirement

We suggest you review your financing options prior to retirement, to ensure your future income will allow you to maintain your lifestyle, including making future mortgage payments. It may make sense to pull equity out of your home now for future living expenses. Secured lines of credit and reverse mortgages are two of the additional mortgage options seniors may want to consider, to truly make this time your golden years.