Bridge financing in Ontario lets move-up buyers close on a new home before their existing home closes — typically up to 90-120 days, secured by the equity in the home being sold. Rates in 2026 sit around prime + 2-4% (currently 8.95%-10.95%) plus a one-time setup fee of $300-$900. For most Ontario buyers selling a Mississauga, Oakville, or Toronto home and buying their next, a bridge loan is the cleanest way to handle non-aligned closing dates. Need help modelling the carrying cost of a bridge? Ask Zara for a daily-interest projection.
What bridge financing actually is
A bridge loan is a short-term loan that gives you access to the equity in a property you have already firmly sold, before that sale's closing date. It "bridges" the gap when you must close on your new purchase before your existing property's sale closes. The lender funds the gap based on a Firm Agreement of Purchase and Sale (APS) on the existing home — meaning the financing condition and inspection condition must already be waived. Lenders typically will not bridge a conditional sale.
Practical example: you sell your Etobicoke detached firm for $1.4M closing July 30. You buy a Vaughan detached for $1.65M closing July 15 — 15 days earlier. You need $300,000 of equity from the Etobicoke home to fund the Vaughan down payment. A bridge loan provides exactly that $300,000 for the 15-day gap, repaid in full when the Etobicoke sale closes.
Maximum bridge amounts and lengths
- Loan amount: typically 80-90% of the net equity from the sale (after existing mortgage payout and estimated closing costs).
- Loan length: 30 days (most common), 60-90 days (common for staggered closings), up to 120 days at some lenders.
- Stretched bridges (180+ days): rare and expensive; usually only available through private lenders.
How much does bridge financing actually cost?
Bridge loan pricing in 2026 has two components: a one-time setup fee and daily interest. The setup fee is usually $300-$900 depending on lender (TD, RBC, Scotia, BMO, CIBC, National Bank, and most credit unions all offer bridge products). Interest is charged daily at prime + 2-4%, so 8.95%-10.95% in the current rate environment.
Cost example: $300,000 bridge for 15 days at 9.95% = $300,000 × 0.0995 × 15/365 = $1,227 interest, plus a $500 setup fee = $1,727 total. Cheap insurance against the alternative of coordinating same-day closings or being homeless for two weeks.
Cost example for a longer gap: $500,000 bridge for 60 days at 9.95% = $8,178 interest, plus $750 setup fee = $8,928. Still manageable for a move-up buyer who locked in a desirable new home.
What's NOT included in the headline cost
Your real estate lawyer will charge an additional $250-$500 to handle the bridge loan documents and disbursement coordination. Some lenders charge a discharge fee on the bridge when it repays — $150-$300. If the bridge extends beyond the original term (because your sale closing got delayed), expect penalty interest rates of prime + 5-7%.
Qualifying for a bridge — the key lender requirements
Bridge financing has stricter qualification than a regular mortgage. Lenders need to see:
- Firm sale APS on the existing property. Conditions on financing and inspection must be waived. Some lenders accept the sale 14 days post-condition removal; others want the deposit cleared and waivers signed.
- Firm purchase APS on the new property. You need a binding contract obligating you to close.
- Mortgage commitment on the new property. The lender providing the bridge usually wants to provide your new mortgage too — bridges are rarely standalone products from a different bank.
- Net sale proceeds clearly calculated. Existing mortgage payout statement, estimated closing costs (commissions, LTT, lawyer), and Statement of Adjustments from your sale.
- Closing date gap not exceeding lender max. Most majors cap at 90 days; some go 120.
If your sale is still conditional (typical in the first 5 days after acceptance), no major lender will provide a bridge — you must wait until conditions are waived. This is why move-up timing often gets compressed into a 2-3 week window between condition removal on your sale and closing on your purchase.
When you actually need a bridge versus when you don't
Many Ontario move-up buyers think they need a bridge when they don't. You only need bridge financing if your purchase closes BEFORE your sale closes. If the dates align (same day or sale before purchase), no bridge is needed.
Scenarios when bridge is essential
- Compressed move-up timeline. Sale closes July 30, dream purchase available with July 15 closing — no choice but bridge.
- Pre-construction completing. Builder forces a specific closing date; you must vacate previous home on that date.
- Multiple-property portfolio. You're closing on property B before property A sells; bridge funds the gap.
Scenarios when you might NOT need bridge
- Sale-of-existing-home condition in your purchase APS. Risky in a hot market but possible — your purchase doesn't go firm until your existing home sells.
- HELOC on existing home. If you already have a HELOC and your existing mortgage is portable, you might tap the HELOC for down payment and avoid the bridge.
- Aligned same-day closings. Possible but stressful; one delayed wire transfer can cascade.
The mortgage portability angle
Many Ontario homeowners have a mortgage with a generous discharge or porting provision. If your existing mortgage is portable, you can move it to the new property — preserving your current (often lower) interest rate. Portability typically requires you to close the new property within 30-120 days of selling the old one. Bridge financing pairs perfectly with portability: the bridge covers the down payment gap while the ported mortgage covers the bulk of the new purchase.
Major Canadian lenders (TD, RBC, Scotiabank, BMO) all offer porting. The new property must qualify under current stress-test rules and the new mortgage size may differ from the old one (port + increase, port + decrease). If you're increasing, the blended rate is calculated as a weighted average of your existing rate and the current rate for the additional amount.
For more on porting versus refinancing math, see our mortgage financing guides.
Bridge financing for non-firm sales — the private-lender path
What if you've found your perfect new home but your existing home isn't even listed yet? No major bank will bridge that — they need a firm sale. Two alternatives:
Private bridge lenders like Vault Mortgage Corporation, Mortgage Company of Canada, and various MIC funds will bridge against equity without a firm sale, but rates run 10-14% plus 2-3% setup fees. Useful in extreme circumstances; expensive enough that you should treat as last resort.
Sale-of-existing-home condition embedded in your purchase APS. Buyer-friendly clause that says your offer is firm only if your existing home sells by a specific date. Sellers in hot Toronto markets often reject these offers, especially with multiple competing bids. But in slower 905 markets or January-February inventory, they're accepted.
Step-by-step bridge financing process
- List your existing home with a competent listing agent — preferably from a major brokerage like Royal LePage, Re/Max, Sutton, Keller Williams, or Coldwell Banker Summit Realty.
- Accept an offer and remove all conditions — this triggers your eligibility for bridge financing.
- Notify your mortgage broker/lender the moment your sale goes firm. Bridge underwriting can take 5-10 business days at most majors.
- Sign the bridge commitment letter alongside your new mortgage commitment.
- Your lawyer coordinates both closings — receives bridge funds, disburses to seller, then receives sale proceeds at the second closing and repays the bridge.
- Bridge automatically discharges the day your sale closes and proceeds repay it.
Risks and how to mitigate them
The biggest risk: your sale falls through. Even firm sales sometimes collapse — buyer financing falls apart at the last minute, buyer death/illness, fraud, or undisclosed defects discovered. If that happens, your bridge becomes immediately due and you're scrambling. Mitigation: insist on a strong deposit from your buyer ($50,000+ for typical TRREB transactions, $100,000+ for higher-priced homes) so they're financially committed.
Second risk: closing date extension. If your sale's closing gets pushed (buyer's lawyer delay, lender funding delay), your bridge term may extend at penalty rates. Mitigation: build a 5-7 day buffer into the bridge term beyond the expected sale closing date.
Third risk: rate shock on the new mortgage. If you locked your new mortgage rate 90+ days before closing, you might be carrying a rate that's no longer competitive. Mitigation: negotiate a rate-drop clause with your new lender — most majors honour this if rates drop more than 25 bps before closing.
Frequently asked questions
How quickly can I get a bridge loan?
Most Canadian major banks (TD, RBC, Scotiabank, BMO, CIBC) can underwrite and commit to bridge financing within 5-10 business days once your sale is firm. If you've already been pre-approved for the new mortgage at the same bank, the bridge can sometimes close in 3-5 business days. Private bridge lenders move faster — 48-72 hours typical — but charge significantly more.
Can I get a bridge if my new home is in a different province?
Yes, but only if you're using a Canadian national lender (RBC, TD, BMO, Scotia, CIBC, National Bank). The bridge is secured against the existing Ontario property and funds the purchase elsewhere. Provincial credit unions usually require both properties in their province of operation. Cross-border purchases (US property) require very specialized private lenders and are uncommon.
What if I haven't sold yet but I need a bridge?
Major banks won't bridge without a firm sale. Your options are: (1) accept a sale-of-existing-home condition on your purchase APS, (2) approach a private lender for an equity-based bridge at 10-14%, or (3) tap a HELOC against the existing home if you have one set up. The cleanest path is usually option 1 in markets where conditional offers are still accepted.
Does bridge financing affect my mortgage qualification?
For the new property mortgage, lenders consider the bridge as temporary and don't count its monthly payment against your debt-service ratios — provided you have a firm sale that will repay the bridge. If your sale isn't firm, the bridge balance is treated as ongoing debt and DOES affect qualification. This is another reason to firm up your sale before pursuing the new purchase.
Can I bridge a pre-construction final closing?
Yes. If your pre-construction final closing date is fixed and you're selling your existing home to fund the new condo's final closing, bridge financing works the same way. Pre-construction buyers often pair bridges with the new mortgage funded by their pre-construction builder's preferred lender. Talk to your mortgage broker 60-90 days before final closing to coordinate.
Key takeaways
- Bridge financing solves the timing mismatch between selling and buying.
- Costs are modest: 1-2 weeks of bridge typically runs $1,500-$2,500 all-in.
- You need a firm sale APS to qualify with a major bank.
- Major banks bridge up to 90 days at prime + 2-4%; private lenders go longer at higher rates.
- Pair bridge with mortgage porting to preserve your existing rate.
- Build a buffer into your bridge term in case closings get delayed.
