Paid Off the Mortgage? The 4 Housing Costs Your Retirement Still Has to Cover

The goal this week is one written number: what it will cost each year to keep your home once your employment income stops. Being mortgage-free removes the biggest line in the budget, but four costs remain, and most of them rise faster than people plan for.

1. Pull your latest property tax notice and confirm the Home Owner Grant was actually claimed. The grant has to be applied for each year, and owners who move to paying taxes directly after the mortgage is gone sometimes miss it. Once you turn 65, a larger grant amount applies, so check that it switched over. If taxes are squeezing your cash flow, look up the BC Property Tax Deferment Program, open to qualifying owners 55 and older. It lets you defer annual taxes at an interest rate set at prime plus 2%, compounded monthly, for taxes deferred from the 2026 tax year onward (earlier deferrals stay at prime minus 2%, simple), secured by a lien on the home. The catch is that the balance grows and comes out of your estate. Have that conversation with your kids before you sign, not after.
2. Get your home insurance renewal out and call your broker to ask what is driving the increase. Premiums in BC are climbing as insurers price in wildfire and flood exposure, and parts of the Cowichan Valley sit near both forested interface areas and river floodplains. Ask three specific questions: Is overland flood coverage included? What is my deductible, and could I absorb it on a fixed income? Has my risk rating changed? Then budget insurance as a cost that goes up every year, not a flat number.
3. Open a separate savings account and fund it at roughly 1% of your home's value each year for maintenance. That is a common rule of thumb for a detached home. Next, write down the age of your roof, heating system, hot water tank and, if you are rural, your septic system. Anything due in the next ten years is a known bill, not a surprise. Pay attention to where that money will come from. A large RRSP or RRIF withdrawal to pay a roofer counts as taxable income, and it can push you into the Old Age Security recovery tax, so the real cost of the repair ends up higher than the quote. If you are still working, set up a home equity line of credit now, while you have income to qualify. You will still have to pass the stress test, which uses the higher of your contract rate plus 275 basis points or 5.25%. Qualifying is much harder once a T4 is gone, and an unused line costs nothing to hold.
4. If you own in a strata, or plan to downsize into one, request the depreciation report and the last two years of council minutes. Strata fees rise with inflation, and a thin contingency reserve is how owners end up with a special assessment for a roof or building envelope. The minutes show what council is already discussing. If downsizing is your plan, run the full math: commissions, legal fees, moving costs and higher monthly strata fees can shrink the equity you expected to free up.

One more decision belongs on this list. Paying off the mortgage was the right goal for many people, but it was never the whole plan. Back in 1999, Royal LePage data showed only 8% of Canadians carried mortgage debt into retirement. Plenty of today's retirees own their homes outright and still have too little in their TFSA or RRSP to cover a $20,000 repair without stress. Having equity in the house is not the same as having money you can spend. If most of your net worth sits in the house, it is worth running the numbers on keeping some liquidity, even if that means carrying a small, structured line of credit.

The item people skip most often is number 3. Nothing is broken yet, so funding a repair account feels optional. It stops feeling optional the month the roof starts leaking.