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Mortgage Squad Advisors
Bridge financing

Close your purchase before your sale. Without the double-mortgage stress.

Bridge financing covers the gap between buying your next home and closing on your current one. Same-day funding, interest-only payments, zero penalty when your sale completes.

Same-day fundingInterest-only paymentsNo prepayment penalty30-180 day termsUse sale proceeds as down paymentCloses simultaneously with purchase
5-star rated| FSRA #13737| 5-min pre-qualification
Today’s best 5-yr fixed
4.19%
across 50+ lenders
Live math · Bridge financing
$3,218/mo
Property value$750,000
Down payment$150,000
Get pre-approved Full math
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Tell me about bridge financing mortgages
5-star rated| FSRA #13737| 50+ langs

The hardest part of moving up isn’t finding the next home — it’s the closing-date gap. Your sale closes Friday; your purchase closes Tuesday. Without bridge financing you’re either forced to ask the seller for a closing extension (often rejected), carry two mortgages and beg your bank for an interim loan, or worst case, blow up the purchase. Bridge financing solves it cleanly — funded same-day, interest-only, gone when the sale closes.

Bridge financing is the short-term loan that lets your purchase close on Tuesday even though your sale doesn’t close until Friday. We arrange bridge loans secured against the equity in the home you’re selling, so you can deliver your down payment on the new place without waiting for the sale proceeds to land. Most bridge files close same-day with your purchase, run interest-only, and pay out automatically when the sale completes — usually within 30 to 90 days.

What you get

Why Canadians choose Mortgage Squad Advisors.

Same-day funding alongside your purchase — no closing delay
Interest-only payments (no principal payments during the bridge)
No prepayment penalty when your sale closes — bridge pays out automatically
Terms from 30 to 180 days — match your sale closing date exactly
Loan amount up to the equity in your departing home (after existing mortgage)
Same lawyer typically handles both closings — no extra legal coordination
Often arranged by the same lender funding your new purchase mortgage (one source, one approval)
Bridge rate is short-term — usually prime + 1-4% — and you pay only days you use it
Stress-test exemption — bridge is a sale-proceeds loan, not a long-term mortgage
Works with conditional sales (firm offer required, conditional on financing acceptable)
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How it works

Three steps. No jargon. No pressure.

1

Confirm both deals are firm

Bridge requires a firm sale agreement (financing condition cleared) on your existing home and a firm purchase agreement on the new one. Conditional sales generally need to firm up first, though some lenders bridge against an unconditional sale at higher rates.

2

We arrange the bridge alongside your purchase mortgage

Most often the same A-lender funding your new purchase will bridge against your sale — one application, one approval, one funding day. We size the bridge to your down-payment gap plus closing costs.

3

Both deals close, bridge pays out automatically

On purchase day the bridge funds alongside your new mortgage. On sale day (often days later) the sale proceeds repay the bridge in full. You owe interest only on the days the bridge was outstanding. No prepayment penalty.

Run the math first

“Our sale closed nine days after our purchase. Without bridge we would have lost the new house. The whole bridge process took about an hour to arrange and ran maybe $400 in interest for nine days. The lender handled both closings and we never thought about it again.”

— Daniel & Erin K., Move-up buyers, Oakville ON
FAQ

Common questions, answered.

Don’t see yours? Ask Maya — instant answer, any time.

What is bridge financing?
A short-term loan that covers the gap between buying your new home and closing on the sale of your current one. The bridge is secured against the equity in your departing home, funded the same day your purchase closes, and repaid automatically when your sale completes — usually within 30 to 90 days.
How much can I borrow with a bridge loan?
Up to the equity in your departing home, minus your existing mortgage balance and any closing costs. So on a $1.2M sale with a $500K mortgage, you have roughly $700K of bridge-able equity (minus selling costs and a safety buffer). Most files bridge $50K-$300K to cover the down payment shortfall.
What does bridge financing cost?
Interest only, typically prime + 1% to prime + 4% depending on the lender. On a $150K bridge for 30 days at prime + 2% (~8%), expect roughly $985 in interest. There’s usually a small administration fee ($300-$500) and an additional legal cost for the bridge registration.
Do I need a firm sale to qualify for bridge?
Almost always — the bridge is secured by sale proceeds, so the lender needs the sale to be firm (financing condition cleared). Some lenders will bridge against a conditional sale at materially higher rates; some won’t bridge without an unconditional sale. We’ll tell you which lenders accept your specific situation.
What if my sale falls through?
If a firm sale collapses (rare), the bridge converts to a short-term equity loan and you have a defined period (typically 90-180 days) to either re-sell or pay it down. We structure the bridge with a contingency plan before funding so you’re never surprised.
Bridge financing vs HELOC for the down payment?
HELOC is cheaper rate-wise but requires existing setup and qualifies against debt-service ratios. Bridge is purpose-built for the sale-purchase gap, funds same-day with your purchase, and exits automatically. For one-time gap funding, bridge usually wins on simplicity and speed; for ongoing equity access, HELOC wins on rate.
How long does it take to arrange bridge financing?
Most files arrange in 1-3 business days once both purchase and sale agreements are firm. Same-day funding happens on purchase closing day. If you’re working with the same lender funding your new mortgage, the bridge is often a same-application add-on with no separate underwriting wait.
Do I pay penalty when the bridge closes?
No — bridge financing is designed to be repaid from sale proceeds and carries no prepayment penalty. You pay interest only for the days the bridge was actually outstanding.
Can I bridge if I’m self-employed or new to Canada?
Yes — bridge underwriting focuses on the sale agreement and equity rather than income (income was already underwritten for the new purchase mortgage). Self-employed and newcomer files bridge as readily as employed ones, provided the new purchase mortgage was approved.
Does a bridge loan count against my stress test?
No — bridge financing is exempt from the federal mortgage stress test because it’s a sale-proceeds loan with a defined exit (your firm sale), not a long-term residential mortgage. Your new purchase mortgage is the one stress-tested.

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