Bridge loan in Canada: what to do when your closing dates don't line up

Short answer: A bridge loan in Canada is short-term financing for the days or weeks between buying your next home and selling your current one. It lets you use the equity in the home you're selling toward the down payment before the sale money arrives, and it's repaid from the sale proceeds. In our experience, lenders usually want a firm sale agreement on your current home first. It costs more than a regular mortgage rate, but because interest only runs for the gap, the total for a short bridge is often modest. If your sale isn't firm, there are other ways to bridge the gap.

This guide is for homeowners who've found their next home, or sold their current one, and have closing dates that don't match. It covers how bridge financing works, a worked cost example, what lenders usually ask for and the alternatives. For a step-by-step look at using your equity, see our equity takeout page.

How a bridge loan works

Say your purchase closes on March 1 and your sale closes on March 31. On March 1, you need the down payment for the new home, but your equity is still locked in the old one. A bridge loan advances that equity for the gap. On March 31, your sale closes, your lawyer pays off the old mortgage and the bridge loan, and you're left with one mortgage on the new home.

A few points that matter:

• It's usually arranged with the lender for your new mortgage. In our experience, many lenders offer bridge financing only alongside the purchase mortgage they're funding.
• A firm sale is usually required. Lenders typically want to see an unconditional agreement of purchase and sale on the home you're selling, so they know where repayment comes from.
• It's short. Terms vary by lender, but bridge loans are built for gaps of days or weeks, not open-ended waits.
• You carry two homes for the gap. Your existing mortgage payment continues until the sale closes, so budget for both for that period.

Worked example: a 30-day gap

Example (illustrative): you've sold your home for $900,000, with $400,000 left on the mortgage. After assumed selling costs of $30,000, about $470,000 of equity comes to you on March 31. You're buying a $1,100,000 home that closes March 1 and plan to put $300,000 down. We've assumed a bridge rate of prime plus 2.75 points. With the prime rate at 4.70% as of November 4, 2026 ^[6], that's 7.45%, plus an assumed $500 set-up fee.

The rate, fee and selling costs are assumptions for the math, not quotes. Your actual bridge terms depend on the lender and your file, OAC.

Seen this way, a short bridge is often a reasonable price for buying the right home on the right date. The cost grows with the length of the gap, which is why the closing dates matter as much as the rate.

Closing dates don't match? A licensed 8Twelve agent can line up a purchase mortgage with bridge financing across 65+ lenders before you firm up your offer, OAC. Start a purchase application

What lenders usually look at

1. The firm sale agreement on your current home, with the sale price and closing date.
2. Your current mortgage statement, so the lender can estimate the equity that will come to you.
3. The purchase agreement and the closing date on the new home.
4. Your income and credit, because the new mortgage still has to qualify. At a bank, an uninsured mortgage is tested at the greater of your contract rate plus 2% or 5.25% ^[5].
5. A realistic gap. In our experience, the shorter and more certain the gap, the easier the approval.

If your sale isn't firm yet

Buying before you've sold at all is a bigger step, because there's no confirmed sale price or date. The options can include:

Each of these puts more risk on you if the sale takes longer or the price comes in lower than planned. Building in a buffer, and talking to a licensed agent before you waive financing conditions, helps a lot. For a closer look at the line-of-credit route, read our HELOC guide.

Don't forget your current mortgage

• Porting. A portable mortgage lets you transfer your balance, rate and terms to the new home, and may help you avoid a prepayment penalty ^[1]. Ask your lender about eligibility and restrictions, and whether you'll need to borrow more ^[1]. Our mortgage portability guide explains the timing rules.
• Penalties when you sell. Paying back your mortgage before the end of the term, including when you sell, can trigger a prepayment penalty ^[2]. Ask for the figure early so it's in your numbers.
• Closing costs. Legal fees and, in many provinces, land transfer tax come due at closing. Our land transfer tax calculator gives you an estimate.

A bridge loan in Canada is a short, practical fix for closing dates that don't line up. With a firm sale and a realistic gap, it lets you buy the next home on time without waiting for the sale money. Check your porting options and penalty first, line up the financing before you firm up, and use our affordability calculator to test the new mortgage.

This article is for general information only and isn't financial, legal or tax advice. Rates, products and terms change without notice and are available on approved credit (OAC). The rate and terms you qualify for depend on your individual financial situation, including credit, income, property and loan-to-value. "Best rates" means the most suitable options available for your situation, not a guarantee of the lowest rate. Example rates and payments are for illustration only, as of November 10, 2026, and are not an offer. 8Twelve Mortgage arranges mortgages through 65+ lenders and does not lend directly. Licensed across Canada — see our licences.

8Twelve does not fund bridge, second or private mortgages; we arrange them with third-party lenders, and any lender or brokerage fees are disclosed in writing before you commit. Private mortgages carry higher costs. The 7.45% bridge rate (prime of 4.70%, per Bank of Canada data for November 4, 2026, plus an assumed 2.75 points), the $500 fee and the $30,000 of selling costs are assumptions for illustration, not market quotes. Lender requirements for bridge financing vary; the points marked "in our experience" reflect our brokerage's experience, not a published rule.