Forty-seven percent of Ontarians expect to still be paying for a mortgage into their retirement years, according to a study released by BMO Financial Group last week. This despite the fact that retiring mortgage free not only makes for a more enjoyable lifestyle – it’s a smart financial move.

“If your retirement is only a few years away, it’s wise to try and pay off your mortgage before you enter retirement,” says Laura Parsons, Mortgage Expert, BMO Bank of Montreal. This is due to the simple fact that less employment income means less money to manage your debt load, says Tina Di Vito, Head, BMO Retirement Institute.

Strategies include choosing a shorter amortization or switching to bi-weekly payments – both of which mean paying a little more down and decreasing the ensuing debt years down the road. But in the years immediately before retirement these options may not be the most effective choices; there simply isn’t enough time to make a significant dent. Fortunately, there is another way to retire mortgage free.

If you’re living in one of Ontario’s real estate hotspots, you likely have substantial equity in your home, even if you are still carrying a mortgage. That equity will go a long way in many Ontario small towns, including some of the most beautiful in the province. This might mean downsizing a little – but maybe not as much as you think. Moving from a four-bedroom home in the GTA to a condo in the same community to save money will mean settling for a much smaller place, as real estate values will be comparable. But you’ll find a small-town Ontario retirement community can mean less downsizing for the same value – and can offer a more enjoyable retirement lifestyle to boot.

Move an hour or two out of the more expensive regions, and you’ll be able to retire from that mortgage along with your job.

Here’s a great article from MoneySense Magazine on the benefits of downsizing, with some ideas to help you determine if retiring mortgage free to small town Ontario is right for you.