Schwarzer recently celebrated 10 years on Teesside, but his contract expires at the end of the current campaign and he is yet to sign a new deal.
The Australia international has made it clear that he wants to finish his career after the 2010 World Cup, which is proving a stumbling block for Southgate.
The Boro manager appears hesitant to offer Schwarzer the comfort of a two-year deal in the knowledge that he has aspiring keepers in his ranks.
"Mark said before Christmas he didn't want to discuss his contract before January at the earliest, explained Southgate.
"I know he wants to play for another two years, but it's not straightforward because he wants to go into the next World Cup with Australia, which gives him fantastic motivation.
"Whatever decision I make impacts on the two young keepers here, Ross Turnbull and Brad Jones."