How bridge financing works
When you have a firm sale of your existing home but its closing date comes after your purchase, a bridge loan may advance part of the expected sale proceeds. The loan is generally repaid when the sale closes. Availability, maximum term and amount depend on the lender.
What lenders usually want to see
- A firm purchase agreement for the new property
- A firm sale agreement for the existing property
- Details of both closing dates
- Current mortgage payout information
- Evidence of the expected net sale proceeds
- A completed mortgage approval and acceptable property
Calculate the real bridge amount
The expected sale price is not the amount available for the next purchase. Subtract the existing mortgage payout, real-estate commission, legal costs, adjustments and other amounts owed. The bridge amount should be limited to the verified shortfall between closings.
Costs and risks to review
- Bridge-loan interest and administration fees
- Legal registration and discharge costs
- Carrying two properties during the overlap
- Changes to the expected net sale proceeds
- A delayed or failed sale closing
- The lender’s maximum bridge period and repayment terms
Coordinate the dates before removing conditions
The mortgage lender, lawyer and real-estate professionals should all understand the closing sequence. Confirm the bridge approval, exact amount, conditions and backup plan before relying on the sale proceeds for the purchase.
Frequently asked questions
What is bridge financing in Ontario?
It is short-term financing used when an accepted home purchase closes before the proceeds from a firm sale are available. It is typically repaid from the sale closing.
Do I need a firm sale to get a bridge loan?
Many lenders require a firm, unconditional sale agreement before approving a bridge loan. Requirements vary, so confirm them before setting closing dates.
How long can bridge financing last?
The maximum period depends on the lender and transaction. Bridge loans are intended for short closing-date gaps, not long-term financing.
How much bridge financing can I receive?
The amount is usually based on the verified equity needed for the purchase and the expected net proceeds after mortgages, commissions, legal costs and other obligations are deducted.
Reviewed by Sunny Nayyar, Mortgage Agent Level 2FSRA #M23007062Tango Ontario Brokerage #13691Serving OntarioUpdated September 18, 2026
