Unlocking Canada’s Longevity Advantage with Home Equity

Key Takeaways

Canada is now a super-aged nation, with one in five Canadians aged 65 and older. That figure is set to rise to one in four by 2030.
Seniors face a decades-long retirement journey across multi-stage lives, but with inflation eroding government benefits, flatlining workplace pensions, and limited liquid savings, many feel financially unprepared.
Most Canadian seniors have the bulk of their net worth locked inside their homes, yet traditional ways to tap into that equity to support retirement income or age in place have been limited to downsizing or taking on new debt.
Clay Financial launched the first Home Equity Sharing Agreement (HESA) in Canada in 2024 to give seniors a new option for accessing a percentage of their home’s value as a tax-free, lump-sum payment with no monthly debt payments or accumulating interest, in exchange for Clay sharing in the home’s future change in value. For this innovation, Clay was selected as a winning UpLink Venture in the Shaping Canada’s Longevity Advantage Challenge, led by the World Economic Forum’s innovation platform, UpLink, in collaboration with Manulife and the World Economic Forum’s Longevity Economy Initiative.
As shared-equity products are still nascent in Canada, Clay has built in industry-leading consumer protection measures including transparent, open-access educational resources, mandatory independent legal advice on all HESA contracts, and a mandatory 10-day cooling-off period after signing.

Strengthening Canada’s Retirement Income Pillars

Canada is in the midst of a significant demographic shift. This year, the country officially became a super-aged nation, with one in five Canadians now aged 65 or older, and almost one in three aged 55 or older.¹

The nature of retirement is also undergoing major changes. Retirement today is a decades-long journey that Canadians must plan carefully for, to make sure they have enough money set aside not just for daily living and enjoyment, but possible health and care needs down the road.

But the three traditional pillars of retirement income are showing cracks.

While Canada Pension Plan and Old Age Security payments remain the backbone of many retirees’ monthly budgets, a higher cost of living is eroding their purchasing power. After declining from the highs of the 1970s,² workplace pension plan coverage has plateaued at about two in five paid workers.³

Personal savings, the third pillar, are in many cases not able to fill in the gaps. In survey after survey, Canadians say they are worried about not being financially able to retire. They believe they will need $1.7 million saved to retire comfortably, but Statistics Canada data shows that the median retirement savings balance of pre-retirees and retirees is well below that number. And inflation is chipping away at their ability to contribute more to their long-term savings.

For most Canadian seniors, the bulk of their wealth is not sitting in a bank account. It is locked inside their home. Yet for a long time, homeowners have had few ways to access their home equity without either selling their home or taking on debt. Those are not feasible or desirable options for everyone.

Clay Financial launched Canada’s first Home Equity Sharing Agreement (HESA) in 2024 to bridge that gap. A HESA allows homeowners to access a percentage of their home’s value as a tax-free, lump-sum cash payment. Seniors can use the funds for anything — from supplementing retirement income and paying off debt to funding accessibility renovations, in-home care, or an income-generating annuity. In exchange, Clay shares in the future ups and downs of the home’s value, aligning our incentives as a true partner in home equity. Because a HESA is not debt, there are no monthly payments, no interest rates, and the agreement never touches the existing equity homeowners have already built.

While not every household will need a HESA, the option strengthens Canada’s retirement income pillars — giving seniors the flexibility to retire on their timeline, stay out of debt, and remain in the homes they love.

Closing the Retirement Gap

Many Canadian seniors face a structural financial mismatch: they have built significant savings on paper, yet remain cash-constrained in their daily lives. That is because home equity makes up so much of their overall wealth.

Three in four seniors aged 65 and older own their home, holding a collective $1.9 trillion in home equity. When including those 55 and older, that balloons to $3.3 trillion.⁴ For the average 65-and-older household, home equity is 54% of their total net worth.

Their liquid savings, in contrast, are much smaller. In 2023, the median combined balance of RRSP, RRIF, LIRA and other registered savings accounts for Canadian households aged 65 and older was just over $102,000, and for those aged 55 to 64 it was $120,000. The median TFSA balance that year was just over $52,000 for those aged 65 and older, and $39,000 for those aged 55 to 64.⁵

Canada’s financial services sector has spent decades focusing on helping Canadians accumulate wealth, and for very good reason. But heading into a multi-decade retirement, many seniors lack the tools to decumulate the wealth they actually have, because their largest asset is both highly illiquid and the home they live in.

Clay’s HESA allows homeowners to close that retirement savings gap by using the wealth built up in their homes to supplement their liquid private savings. Older workers who have delayed retirement strictly out of financial necessity gain the flexibility to step back on their own terms. Meanwhile, retired homeowners on tight monthly budgets can create financial breathing room to enjoy retirement.

Enabling Aging in Place

Over 80% of older Canadians want to remain in their own homes as they age,⁶ to preserve their independence and dignity in retirement. After years or decades in the same place, seniors have developed strong ties to their community; hobbies, activities and routines that they enjoy; formal medical and well-being supports; and informal neighbourhood support systems that prevent social isolation. These are all important contributors to a fulfilling and successful retirement.

But few have planned financially for the accessibility modifications or in-home care costs they may need to remain at home.⁷ While public system support does exist, the number of weekly care hours is limited.

Being hit with new care needs can strain retirement budgets to breaking, forcing seniors to disrupt the fabric of their lives by downsizing to free up capital. In the absence of more affordable support, many also rely on adult children or other family members for informal caregiving. Almost half of the 7.8 million unpaid caregivers in Canada were caring for a parent or parent-in-law, according to StatCan, typically while also working.⁸

Accessing their home equity through a HESA allows seniors to cover the renovations or in-home care expenses they need to remain comfortably and safely in their homes and communities as they age.

Enabling seniors’ independence relieves strain elsewhere. Adult children are freed of some of the emotional and financial burden of caregiving. And as Canada’s already overburdened public health-care and long-term care systems deal with increasing demand, enabling more seniors to age in place with in-home care can act as a private-market pressure-relief valve.

Deleveraging Household Finances

More seniors are entering retirement still carrying debt than ever before. Almost one-third of Canadians who had recently retired or were nearing retirement in 2025 were still making mortgage payments on their primary residence, according to a Royal LePage and Leger survey.⁹ That is well up from just 8% in 1999.

Canadians aged 55 to 64 also saw their mortgage balances grow 6% year-over-year in 2025, according to StatCan data.¹⁰ This could possibly be due to familial gifting to help children buy a home, or seniors choosing to refinance or extend their amortization periods to manage cash flow.

When retirees with fixed budgets look to their homes to relieve these pressures, traditional options fall short. In an expensive housing market, downsizing rarely frees up as much cash as hoped, while debt products with compounding interest can potentially erode existing home equity and derail estate plans.

When considering a HESA, many of the seniors we work with experience a lightbulb moment when they realize that, because we only share in their home’s future change in value, the agreement cannot touch or erode the equity that they start with.

We see our HESA as an important tool for helping seniors reduce their reliance on debt with mandatory monthly payments. Those carrying an existing mortgage, home equity line of credit, or credit card balance can use a HESA to eliminate those debt payments, freeing up their monthly cash flow for daily living and lifestyle expenses. It can also decrease retirees’ reliance on debt-based products to fund their retirement, while still protecting their starting equity and inheritance plans.

Safeguarding Homeowners

As shared-equity products are still nascent in Canada, we built consumer protection measures into our HESA to ensure the homeowners who work with us fully understand how our agreement works, and its benefits and obligations. We want homeowners to feel empowered when they work with us.

We take a zero-pressure, education-first approach in working with homeowners. Our HESA calculator is the most detailed publicly available calculator of its kind among shared-equity products around the world, and allows homeowners to get an initial understanding of what their final payment could look like under a range of scenarios. The calculator, and our artificial intelligence educator, Clayton, give homeowners some initial numbers and answers to their questions without having to log in or create an account.

For homeowners who decide to work with us, we require them to get independent legal advice on their HESA. We also have a mandatory 10-day cooling-off period after signing to make sure they are comfortable with their decision. These safeguards ensure that homeowners move forward with full confidence that our HESA is the right solution for their needs.

Building the Longevity Economy

Capital is upstream of nearly every longevity solution: unlocking home equity gives Canadian seniors liquidity to access everything from in-home care and mobility modifications to annuities and age-tech innovations tackling social isolation. Rather than replacing existing retirement supports, tapping into home equity shores up the third pillar of private savings.

For decades, Canadians were encouraged to buy a home and pay down a mortgage as their primary savings vehicle. During the accumulation years, a dollar built in home equity looks equivalent on paper to a dollar saved in an RRSP or TFSA. In retirement, that equivalence breaks down: you can sell a few shares of an index fund to cover expenses, but you cannot sell off a spare bedroom.

At a time when personal savings carry more weight than at any point in the past eighty years, most seniors have the bulk of their net worth locked inside their homes. That mismatch has forced retirees into an impossible bind: choosing between staying in the home they love and accessing the wealth inside it to fund their lives. Giving homeowners a debt-free way to tap into that equity solves that trade-off.

Seniors deserve options for managing their wealth on their own terms. Whether the right path is a HESA, downsizing, or a reverse mortgage will always be a personal decision based on a household’s finances, goals, and legacy plans. But solving a $1.9-trillion liquidity problem at scale cannot fall on government budgets or individual trade-offs alone. It requires mobilizing institutional capital through private-market structures where commercial incentives are genuinely aligned with the homeowner.

As a winning UpLink Venture in the Shaping Canada’s Longevity Advantage Challenge, led by UpLink and Manulife, in collaboration with the World Economic Forum’s Longevity Economy Initiative, we are excited to collaborate with our ecosystem partners across policy, aging advocacy, financial planning, and the capital markets to advance the financial resilience of Canadian seniors.

Analysis by Clay Financial based on Statistics Canada’s population estimates on July 1, 2026, by age. ↩︎
See Statistics Canada’s pension coverage data. ↩︎
See Statistics Canada’s analysis of registered plan coverage data. ↩︎
Analysis by Clay Financial based on data from Statistics Canada’s Distributions of Household Economic Accounts and Survey of Financial Security. ↩︎
See Statistics Canada’s Survey of Financial Security. ↩︎
See the National Institute on Ageing’s 2025 Ageing in Canada Survey. ↩︎
See footnote 6 above. ↩︎
See Statistics Canada’s analysis of caregiver data. ↩︎
See Royal LePage’s analysis of its Leger survey. ↩︎
See Statistics Canada’s analysis of household economic accounts data. ↩︎

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